I heard that the reward is halved every 4 years after each halving, so the reward miners will receive will always approach zero. To maintain the Bitcoin network, the price of Bitcoin must keep rising infinitely, which is impossible. Could there be a point where the value of the Bitcoin miners receive is almost zero, and the Bitcoin network collapses due to a lack of miners?
Is it possible that Bitcoin could increase its total supply in the future? But that would certainly cause Bitcoin’s price to drop significantly.
Could Bitcoin switch to PoS like Ethereum? That would also cause Bitcoin’s price to fall.
I don’t know if my understanding is correct
In fact Bitcoin's block fees are halved every four years, resulting in a reduction in the number of new Bitcoins issued. This design is intended to create failure. It mimics precious metals like gold. However, you are right that this raises questions about the sustainability of mining incentives as wages fall.
Of course, it is an interesting side note: block fees decrease. Transaction fees will increasingly be a percentage of revenue for the mining industry. With strong enough demand for Bitcoin, these fees can compensate for reduced block fees. Even assuming you can't predict future price movements, so long as Bitcoins continue to gain traction, this demand should drive the price up high enough that enough people will maintain interest in mining.
Your question in respect of the general nature and transition to Proof of Stake (PoS), Bitcoin has a supply limit of $21 million and if you alter that would go against the main principles. It leads to degradation in trust in the network. For a PoS migration, the Bitcoin community will probably do this because of security concerns and governance, which is based on functionality.
It all depends on a number of factors, including technological development, the regulatory environment, and market needs. It's a very interesting space to explore. And such conversations are important for understanding how these forces develop.
if the price or fees don't rise enough, it could result in lower miner profitability, potentially reducing the number of miners and compromising the security of the network. It is possible that mining could become less profitable for smaller miners, but this would likely result in mining centralizing rather than the network collapsing altogether.
What fees? Do you mean Bitcoin transfer fees?
If you refer to Bitcoin value, it is always increasing although it follows 4 years-cycle.
Well, it doesn't solely about the Bitcoin value but it is also about the Bitcoin adoption. As long as Bitcoin adoption continues, people must keep interesting in Bitcoin. This will keep the interest of miners. Moreover, the price of Bitcoin never disappoints the holders, there will be always many people to try mining Bitcoin.
For small miners, the equipment and electricity will be quite expensive. It may be hard for them to spend capital on these things. But for big miners, it seems no problem because they also target for bigger number of Bitcoin.
And it is fees for Bitcoin transfers that are critical for internet stability, especially as block fees collapse with time due to halving. Because blogging fees have crashed. Transaction fees are expected to produce the lion's share of miner's revenue.
You are right that adoption is key as Bitcoin continues to gain momentum around the world. More and more people will use the internet. This results in higher transaction volumes. And later the transaction fees are higher. This may help block them from being underpaid. This often incentivizes mining to protect the network. Even though mining fees are decreasing.
As discussed, I believe it can be a challenge for small-scale miners. As the equipment is costly as well as electricity The state is getting overwhelmed by large-scale mining operations that absorb vast sums of capital. However, if Bitcoin turns out to be volatile and demand goes up then It would be found that these giants of mining will continue to earn a profit from mining even if fees go very low.
Hence, it seems that the long run sustainability of this Bitcoin network is very much dependent on a fine balance between the adoption process. Mining Industry Efficiency and Resurging Transaction Fees: This would be an interesting area to watch, especially as we get closer to the next chapter.
