Block Rewards when Bitcoin hits $1M

[STT]

Thanks for the reply and yes I do realise you can be in a pool but is seems its not very profitable unless you are using virtually free power. For a dedicated mining company the costs to mine at least one $1M Bitcoin every 10 minutes it would surely mean the cost to get that coin must also be approaching $1M. Presently it takes ~150,000 kWh to produce one bitcoin on average so as the value of the bitcoin increases the cost to produce it must also increase.

People assume power cost and production is linear and uniform when it is not.    We have to remove this assumption first, it is incredible but also true I think that power can be free at times in some parts of the world.    We havent cracked the problem of nuclear fusion just yet to achieve easy free power but phenomena such as geothermal power localised in some areas and other hard to transmit spikes in energy mean power can be far cheaper then simply burning gasoline.
   Energy is literally thrown away in some parts of the world, main reason this occurs is natural inefficiency.   Sometimes a business can thrive purely through increasing efficiency in some way that benefits society, its the basis of capitalism imo.   Transmitting power over great distances causes losses from resistance and cost to build that infrastructure, BTC can be a means to capture cheap energy use and propagate it usefully.   Its not quite the simple argument you might have been sold, alot of things are not simply absolute yes or no as we hear in the news unfortunately.

[eytrycart]

If, and when Bitcoin reaches a FIAT value of $1M one would assume the cost to mine a single coin would be quite high otherwise everyone would be doing it.

No, they won't. Because difficulty will be sky high and the block reward will be much smaller. Because with years the block rewards decrease and with every new miner hashing the difficulty increases.
Actually even current miners may need even cheaper electricity to stay in the business.

Thats the point, as the difficulty increases it will require more hashpower (more energy) to mine. Thus the actual need for Bitcoin to raise its value to a level that covers this increased energy use. Even green energy has a cost in maintaining the infrastructure so the value of Bitcoin will always correlate with energy costs.

[NeuroticFish]

Thats the point, as the difficulty increases it will require more hashpower (more energy) to mine. Thus the actual need for Bitcoin to raise its value to a level that covers this increased energy use. Even green energy has a cost in maintaining the infrastructure so the value of Bitcoin will always correlate with energy costs.

The point is that you should start reading instead of assuming.

It's the other way around. The hash power drives the difficulty.
If the hash power increases, the difficulty rises to keep the block time at ~10 min. If the hash power decreases, the difficulty drops to keep the block time to ~10 minutes.

[eytrycart]

Bitcoin mining has been always profitable and will be always profitable.
Will you mine bitcoin if it costs you more than the price you can buy it in the market?
If the money someone has to spend for mining 1 bitcoin is higher than bitcoin price, the person will no longer mine bitcoin. This causes the total hashrate of the network to decrease. With the decrease in the total hash rate, the difficulty and the mining cost will decrease too. So, mining is always profitable.

Can you explain in laymens terms how the difficulty decreases as the price of bitcoin decreases? I would like to understand this feedback loop.

[eytrycart]

Thats the point, as the difficulty increases it will require more hashpower (more energy) to mine. Thus the actual need for Bitcoin to raise its value to a level that covers this increased energy use. Even green energy has a cost in maintaining the infrastructure so the value of Bitcoin will always correlate with energy costs.

The point is that you should start reading instead of assuming.

It's the other way around. The hash power drives the difficulty.
If the hash power increases, the difficulty rises to keep the block time at ~10 min. If the hash power decreases, the difficulty drops to keep the block time to ~10 minutes.

I am reading and also using this forum as an additional information resource. What you are saying confirms my thoughts. The price of Bitcoin rises, hashpower rises, difficulty rises, energy use rises, energy costs rise.

[eytrycart]

You are forgetting about halvenings, if currently a block rewards 6.25 BTC x $37,000, in the future it could be less than 0.6 BTC x $1,000,000. So the power consumption of the whole network could be less than what it is now.

Who then would be able to afford the cost every 10 minutes, and would this "cost to mine" be a sum of the costs of all miners?

It's irrelevant how much energy it takes to mine one whole coin, because no one really cares about whole coins, miners just want to make profit from whatever the block reward is. And since nearly everyone mines in pools, they will be getting just some milibitcoins from each found block.

I'm not referring to mining a whole coin just the mining process overall, BTC price increase, miners increase, hash rate increase, power demand increase, power cost increase....