what will happen after 21 million bitcoins are mined? (in layman's terms)

[stompix]

Not sure where you are getting this number from? Even if we say that bitcoin goes to $1 million, and you can open a Lightning channel in a transaction of a few hundred vbytes in size, then with a fee rate of 1 sat/vbyte you are looking at $2-3 to open a channel.

If you pay 2$ for opening a channel and we balance the block perfectly and we forget about closing the channel completely you will still only be able to cram in only $8000 worth of fees, so yeah, for you it will definitely work but the miners will have to deal with a reward of just $8000.

From a miner's point of view, sat/b doesn't matter, what matter is the pot, if bitcoin reaches 100k or 1 million I don't see users suddenly paying 10x times more just because of that, the overall fees that people are willing to pay must be enough to compensate for the diminishing reward, and there is no way to force them to pay that much if they don't want.

Two different things, how much is one user willing to pay on tx, and how much is required in fees to keep at least the same level of security as now!

It may be that a further block size increase is needed in the future, but we are nowhere near that stage yet.

More concerning it that we're nowhere near having full blocks actually as on-chain transactions are going down rather than up for the last few years.

[Upgrade00]

Before thinking of the price that would be required, think of the first part mentioned, transactions cost would have to be ~$125k, if we take the last full block, 754925 has 1,492 transactions, so that would be around 83$ per tx, who do you think is going to pay that amount?

It's just a hypothesis and would not be fully put to the test until a while in the future. The perspective of LN taking many of the transactions off chain and only needing to open or close channels on chain, increasing the fees of such individual transactions. The downside is such a situation would practically force everyone to go for off chain means of transacting as, no one would spend ridiculous amount on a single transaction.

[aysg76]

This is based on the assumption that total fees per block will remain static, which as I mentioned above, I don't think they necessarily will.

Most probably the fees will rise as they will not remain static as we are 601 days left from the next halving at block 840,000 when the rewards will be halfed to 3.125BTC per block and coins in circulation will also reduce but the transaction would increase I would say even if we take into consideration the layer 2 like LN channels and you would pay more to confirm your transactions even if we say in the short span also so the miners profitability is still there.

We already know that block space is too limited as it stands to scale bitcoin to global usage, which is why second layer solutions are being developed.

Yeah in the meantime we may see some more development to tackle the fees issues in much more efficient manner but we are seeing the LN capacity being increased each time and they are being used by many to make regular transactions saving them from fees and LN nodes support being rise with bitcoin block space limitations.

In this scenario then fees per block could total 1-2 BTC, rather than 0.1-0.2 BTC (example numbers), meaning a price of $80k rather than $800k in your example.

If that's the case then it's pretty much efficient for miners to have that much amount in fees only as an extra reward along with bitcoin earned so we can say that they will have around $250k as block reward plus $100k-$160k in fees as well so securing the network would still be profitable fort them and we will see more support from the users as well.

[o_e_l_e_o]

If you pay 2$ for opening a channel and we balance the block perfectly and we forget about closing the channel completely you will still only be able to cram in only $8000 worth of fees, so yeah, for you it will definitely work but the miners will have to deal with a reward of just $8000.

Hence my comment about multi-user channels. If you could open a channel which includes 20 users, they can all pay $2 which is fine for the user, but the miner earns $40 for that channel being opened.

Two different things, how much is one user willing to pay on tx, and how much is required in fees to keep at least the same level of security as now!

I don't think we necessarily need the same security as we have now. Bitcoin's hashrate has been on a more-or-less steady upward climb since day 1. It wasn't 51% attacked when the price was 3x what it is now with half the current hashrate, and it wasn't 51% attacked when the price was the same is it now but with double the block subsidy and only a tiny 5% of the current hashrate. It's about making sure the fees ensure the network is secure enough, not that the hashrate continues to increase forever more.

More concerning it that we're nowhere near having full blocks actually as on-chain transactions are going down rather than up for the last few years.

Then we need more adoption and more use as a currency!

[stompix]

I don't think we necessarily need the same security as we have now. Bitcoin's hashrate has been on a more-or-less steady upward climb since day 1. It wasn't 51% attacked when the price was 3x what it is now with half the current hashrate, and it wasn't 51% attacked when the price was the same is it now but with double the block subsidy and only a tiny 5% of the current hashrate. It's about making sure the fees ensure the network is secure enough, not that the hashrate continues to increase forever more.

When the price was 60k, a s19 was 10k , a cool 100$ per TH/s, right now you can buy the pro for 19$/Th/s with next day delivery.
Back in April, you couldn't attack the network because there was no gear to buy, right now you have tons of both older gear that is not feasible to mine with and tons of new gear that isn't being bought and tons of orders getting canceled so you have that one click away.

So it's not about how big the hashrate is, it's about how much it will cost an attacker to take over it, no entity is really feeling threatened by a system with the marketcap the size of Nvidia and with 200k daily transactions, when it reaches 10x times that, do you think $20millions a day will be enough to repel an attack?

Hence my comment about multi-user channels. If you could open a channel which includes 20 users, they can all pay $2 which is fine for the user, but the miner earns $40 for that channel being opened.

It's all good on paper, and of course, almost everyone here (except for franky1) would use it, but you think the average Joe who is angry at banks for taking him 1$ a month for card maintenance will be the one opening and closing channels like that? Make it ten cents and then we talk  

More concerning it that we're nowhere near having full blocks actually as on-chain transactions are going down rather than up for the last few years.

Then we need more adoption and more use as a currency!

Of course, we need more adoption, we need more spending we need usage, not fancy bitcoin towns, laser eyes, and Vulcano bonds, but all those memes about holding two satoshi cause in 20 years you're going to buy an island with it are definitely hurting actual usage.
Fortunately enough there is an almost certain failed experiment happening right now with ETH and I'm pretty sure in a few years we will have plenty to learn from what happens when people just store money in order to get more money out of thin air without doing a thing.

[cryptoaddictchie]

I've been asked this questions many times, but it feels to me like I know answer it in the right way. I would like to know what do you think, and how you explain it in the most simple way, a way that people that are not technical can also understand

Miners adventures on bitcoin will come to an end. But their equipments will not be wasted since they can use it to mine other supplied last coins like dogecoin and others. The value of bitcoin will depend on demand, imagine there would be no bitcoin to circulate coming from them, imagine the action price or effect of it in the long run. It will also be good I guess.

[stompix]

Miners adventures on bitcoin will come to an end. But their equipments will not be wasted since they can use it to mine other supplied last coins like dogecoin and others.

Bruh, 5 years around here and you still think a sha256 ASIC could just mine scrypt just like that? ASICs are not GPUs, if you can't mine bitcoin or the two lame shitcoins cash and sv then there is nothing left to mine with them, recycling is the only thing they are good for! Look what happened after ETh went POS, all those video cards are almost losing money while mining, the same will happen here, instead of 7 cents per th/s a day you will be making 0.07 cents! as in $0.0007.

[cryptoaddictchie]

Bruh, 5 years around here and you still think a sha256 ASIC could just mine scrypt just like that? ASICs are not GPUs, if you can't mine bitcoin or the two lame shitcoins cash and sv then there is nothing left to mine with them, recycling is the only thing they are good for! Look what happened after ETh went POS, all those video cards are almost losing money while mining, the same will happen here, instead of 7 cents per th/s a day you will be making 0.07 cents! as in $0.0007.

Oh my bad Im not a mining guru so i thought it can be possible . But even its mined out all supplied its their choice what to do on those equipment, maybe continue using it on bitcoin for the transactions fee. Probably there are ways how to remedy those unused equipment if that event happened. Prices will definitely go down due to this, but continuing the processing of transaction could increase their fees even without block reward for mining. Im just assuming that they could shift to other coins for the sake of mining.

[PrimeNumber7]

Now I can pay a fee of 50 sats/vbyte to open a channel, and then buy 100 coffees through that channel before I need to close it. In this scenario I have saved money on fees by paying 0.5 sats/vbyte per each of my 100 transactions, but at the same time I have paid 10x what I would usually pay for the block space.

But you will still need to pay on average 1$ for each coffee purchase to conitribute enough to the network.
So you either lock in 1000 coffee purchases or we, hmm, how do I say this, we increase the number of possible transactions in a block, by increasing something... something.. not width, not length, but , maybe size? 

You are really not using LN optimally if you are opening a channel and making a series of one-way transactions. The optimal way to use LN is to open a channel with some value of coin on your side of the channel, to spend some money via various transactions (perhaps "everyday" transactions such as buying coffee), *and* receiving coin via payments for things such as your salary and/or goods/services. So you may open a channel with enough money to pay for 20 coffees, but are able, over a period of time, to buy hundreds of cups of coffee because you continuously receive (a portion of) your salary to the channel.

So someone opening a LN channel can reasonably pay a high fee compared to the size of the channel, if they are confident their counterparty will not give them a reason to close the channel quickly. This will allow miners to receive a larger amount of coin on a per-block basis, even if the maximum block size is not increased.

[stompix]

You are really not using LN optimally

This is exactly the moment where the whole global adoption thing goes south or both or east, whatever is the bad direction where you are 
The moment the average Joe has to do this and that and look at that and this and be sure to balance a lot of things he normally doesn't give a damn about it's the moment the average Joe will say fy this shit ain't for me!

You can't talk about mass adoption when you start by throwing 100 things of what to do and 1000 things not to do at the average citizen who has problems moving his google account on a phone, it all sounds pretty nice and understandable for some who spend hours each day talking about bitcoin but not so much for the rest of the world from which this adoption should come, and the difference when things start to pile up, that you can see even here. Look at LN topics and you will see a lot of users that have not made even the step of installing a client that supports it, the more complicated it gets the less enthusiasm will be about it.

This aside, we're going back to the same problem, nobody gets paid inside the LN so people must constantly open and close channels and so there is less activity and because there is less activity nobody wants to receive their wage there. Replace LN with straight-up Bitcoin and surprise, the same problem we have now!!!!!

[nakamura12]

Earning by fees will be the motivation to run miners long before the last few Bitcoins are mined. The last block reward will be 1 Satoshi for about 4 years.

That's most likely the case where a miner can earn. When all the Bitcoins are mined then miners will no longer mine new coins and they will only earn from transaction fees. I don't know if miners would still be profitable in some part of countries where their electricity bill is not cheap or doesn't have an alternative way to have electricity at low cost. Well, other people do use much higher sats/byte in their transaction even though they amount they transact is not much.

[o_e_l_e_o]

The moment the average Joe has to do this and that and look at that and this and be sure to balance a lot of things he normally doesn't give a damn about it's the moment the average Joe will say fy this shit ain't for me!

There will be wallet software which does all this for you in the background. Just as the average Joe doesn't need to know how to actually create or sign a transaction, or how to use change addresses, or how their private keys are derived, they also don't need to know how to actually open and close a Lightning channel. Their wallet will handle all this for them, and they will just spend freely and receive freely to the same channel without being aware of what is going on in the background.

[aysg76]

There will be wallet software which does all this for you in the background. Just as the average Joe doesn't need to know how to actually create or sign a transaction, or how to use change addresses, or how their private keys are derived, they also don't need to know how to actually open and close a Lightning channel. Their wallet will handle all this for them, and they will just spend freely and receive freely to the same channel without being aware of what is going on in the background.

There are many in current case also whom we can say average Joe who doesn't know how the transactions take place in the backend but only know they can transfer money from one address to another as understanding technical part related to keys and UTXO is not an easy task.

And yes in the future wallet integrated softwares will be there as technical part is being advanced where code is also transformed into human readable format also so they will handle operating LN channel also for the ease of users and this is just testing phase where layer 2 protocols are being implemented and we may see another BIP that focus more on these matters in the coming years.

[2stout]

No more block rewards but there would still be transaction fees.  However, doesn't seem this would make up for block rewards no longer being a thing.  Appears there would be an increase in TX fees, but the question is will they be reasonable or unbearable?

[AGD]

No more block rewards but there would still be transaction fees.  However, doesn't seem this would make up for block rewards no longer being a thing.  Appears there would be an increase in TX fees, but the question is will they be reasonable or unbearable?

Tx fees don`t necessarily need to go up if the total number of tx goes significantly up i.e. mass adoption.

[Welsh]

No more block rewards but there would still be transaction fees.  However, doesn't seem this would make up for block rewards no longer being a thing.  Appears there would be an increase in TX fees, but the question is will they be reasonable or unbearable?

They need to be enough to make mining/processing the transaction worth it. Although, when you compare it to other methods of transferring money, it works out similar. Since, most banks charge for international payments to be processed, and that can actually be much more expensive even compared to when Bitcoin's network was at it's most bloated, and therefore most expensive.

Plus, I envision that fees will be improved upon even further. Obviously a lot of users talk about Lightening, and segwit. These will either be improved further or new implementations will be made with the ultimate goal of making it worthwhile for everyone. Therefore, decent fees, and decent reward. 

[Upgrade00]

Tx fees don`t necessarily need to go up if the total number of tx goes significantly up i.e. mass adoption.

There is a limit to how much tx data can be included in a single block, so mass adoption without a change in block size, would not make much of a difference.

Much of the question about how Bitcoin would respond to end of block rewards would only be answerable in the coming years; any thing else is just speculation.

[Techkoy407]

what is certain is that if there are more and more users or those who invest in bitcoin, then the price will likely shoot up, because for example the supply has been mined, surely all bitcoins will be held by the person who bought it, while the more users invest, the bitcoin price will continue to rise. .

[BlackHatCoiner]

the average Joe

I'm pretty sure the average Joe won't hold custody of their funds, and that's neither good neither bad. It's neutral. Over all, it's good that we have the option to opt-in to self-custody. If some don't value it, I'm definitely not going to convince them be responsible. Nor should I; some are just irresponsible, and trust a third-party more than they trust themselves. Even that way, they can use Lightning hubs and be part of the Lightning Network without holding custody.

There will be wallet software which does all this for you in the background. Just as the average Joe doesn't need to know how to actually create or sign a transaction, or how to use change addresses, or how their private keys are derived, they also don't need to know how to actually open and close a Lightning channel.

Holding keys and signing transactions in the background versus leaving an entire computer running 24/7 to enforce consensus rules and check for cheating attempts is not of the same order of magnitude. I don't bet the average Joe will do the latter. Hell, lots don't even do the former.

[cryptosize]

BTC will be worth the equivalent of billions of USD by then (2140+), so fees alone will be fine.