If transaction per second increased dramaticaly does it solve miner crisis?

[cuddaloreappu]

There are no practical solutions to the forthcoming miner crisis which happens as the network difficulty raises and the reward from block reduces dramatically..


But if  that cap of 7 transaction per second is removed and as bitcoin goes mainstream then it is achieves more than 4000tps like Visa, then even a very little increase in tranasction fee or the same transaction fee as of today could be really large when pooled together, miners can be paid this large money collected right..


according to this if you invest and buy lifetime mining contracts in near future they may payout large money collected from transaction fees


So what is wrong or good in this concept...

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[zimmah]

it will all depend, of course the block reward halves every 4 years, but the value of bitcoin will rise during those four years (at least for now, we can't predict if it will still rise after 10 years)

as the amount of transactions per second rises, the transaction fees could of course go down, and they'll have to go down to keep micro-transactions viable.

with 4000 tps (which is pretty low because that's just visa, not even taking banks and other card companies into account, bitcoin could do much more than that) that would mean 2,400,000 transactions per block (i know that would take up a lot of disk space, but that problem will likely be solved one way or another).

If the transaction fee is 0.00001 BTC (0.01 mBTC) which is 10 times less then the current 'default' fee than the transaction fees alone would make 24 BTC per block.

[Peter R]

There are no practical solutions to the forthcoming miner crisis which happens as the network difficulty raises and the reward from block reduces dramatically..

There is no "forthcoming miner crisis" for bitcoin.  Dogecoin on the other hand will have reached its steady-state inflation rate eight months from now.  At the current market price of DOGE, they'll only have a couple hundred dollars per hour of hashpower securing the network.  It will be very interesting to see how it unfolds...

[An amorous cow-herder]

There are no practical solutions to the forthcoming miner crisis which happens as the network difficulty raises and the reward from block reduces dramatically..

There is no "forthcoming miner crisis" for bitcoin.  Dogecoin on the other hand will have reached its steady-state inflation rate eight months from now.  At the current market price of DOGE, they'll only have a couple hundred dollars per hour of hashpower securing the network.  It will be very interesting to see how it unfolds...

True, Doge will be the interresting thing to watch fairly soon. Payout wise they will the in a situation that BTC will be in in several decades. Basicly all options are plausible, from total failure and price dropping close to zero to becoming the dominant cryptocurrency. After all, at that stage Doge will truly have a fixed amount of coins (unlike BTC wich will still keep "printing" more coins until sometime in the next century). From that point mining will be based solely on utility (signing transactions). Question is, are the any big stealth investors just waiting for the mining rewards to drop to zero?

[DeathAndTaxes]

There is no crisis.  Satoshi designed the system well and with four years between halvings it gives the network decades to build up the necessary transaction and fee volume.

[BurtW]

I feel like the kid in Christmas story.  I thought there was a crisis I was not aware of and rushed to read this thread only to be disappointed by the drivel.  Crisis?  There is no crisis.  Just a steaming pile from the OP.

[DeathAndTaxes]

True, Doge will be the interresting thing to watch fairly soon. Payout wise they will the in a situation that BTC will be in in several decades. Basicly all options are plausible, from total failure and price dropping close to zero to becoming the dominant cryptocurrency.

That isn't plausible and it is reckless to pretend it is.   When it only cost $50 or so to reverse a block the network will have no security.  It will either fail or have yet another hard fork to fix the never ending list of mistakes the developer made.   That is what happens when people take the bitcoin source code and start randomly changing parameters without seeing the implications.

[BurtW]

Oh, I understand now, the "crisis" from the thread title refers to the joke coin DOGE.

I can rest easier now.

[Malin Keshar]

if transactions increase, the work that miners would have to do will increase too. Don't think will make much difference

[DeathAndTaxes]

if transactions increase, the work that miners would have to do will increase too. Don't think will make much difference

Not materially.  The "work" in proof of work is finding the nonce which solves the block.  Adding transactions to a block are a rounding error compared to that.  As an example creating a merkle tree with 5,000 transactions requires 10,000 SHA-256 hashes plus 5,000 ECDSA signature verifications and 5,000 input validations.   The proof of work at current difficulty requires 28 quadrillion hashes.

[hensi]

Increasing difficulty and halving of the btc production was the reason due to which the btc reached 1000mark. there wont be any such miners crisis, and reducing the pay and increasing the difficulty will boost up the price of btc, if you have to increase the tps, then the blocks would have be mined easily and it will create a lot of bitcoin generation leading to the decrease in the value of btc.

[STT]

if transactions increase, the work that miners would have to do will increase too. Don't think will make much difference

Not materially.  The "work" in proof of work is finding the nonce which solves the block.  Adding transactions to a block are a rounding error compared to that.  As an example creating a merkle tree with 5,000 transactions requires 10,000 SHA-256 hashes plus 5,000 ECDSA signature verifications and 5,000 input validations.   The proof of work at current difficulty requires 28 quadrillion hashes.

wow could they not mix transactions into the work difficulty required or am I talking nonsense there because I swear I read something like that was used on one coin

If doge has got the maths wrong and becomes unsustainable in some way, could they fork it to POS instead

cap of 7 transaction per second

I thought it was much higher for some reason, all this exponential rise in asic work could or should allow for greater capacity then that

[cr1776]

There are no practical solutions to the forthcoming miner crisis which happens as the network difficulty raises and the reward from block reduces dramatically..

There is no "forthcoming miner crisis" for bitcoin.  Dogecoin on the other hand will have reached its steady-state inflation rate eight months from now.  At the current market price of DOGE, they'll only have a couple hundred dollars per hour of hashpower securing the network.  It will be very interesting to see how it unfolds...

True, Doge will be the interresting thing to watch fairly soon. Payout wise they will the in a situation that BTC will be in in several decades. Basicly all options are plausible, from total failure and price dropping close to zero to becoming the dominant cryptocurrency. After all, at that stage Doge will truly have a fixed amount of coins (unlike BTC wich will still keep "printing" more coins until sometime in the next century). From that point mining will be based solely on utility (signing transactions). Question is, are the any big stealth investors just waiting for the mining rewards to drop to zero?

Doge never has a fixed supply.  It increases at 5 billion per year indefinitely.

See e.g.  http://www.reddit.com/r/dogecoin/comments/1wuhyj/info_clearing_up_missinformation_about_our/

And there is no crisis.

[cr1776]

if transactions increase, the work that miners would have to do will increase too. Don't think will make much difference

Not materially.  The "work" in proof of work is finding the nonce which solves the block.  Adding transactions to a block are a rounding error compared to that.  As an example creating a merkle tree with 5,000 transactions requires 10,000 SHA-256 hashes plus 5,000 ECDSA signature verifications and 5,000 input validations.   The proof of work at current difficulty requires 28 quadrillion hashes.

wow could they not mix transactions into the work difficulty required or am I talking nonsense there because I swear I read something like that was used on one coin

If doge has got the maths wrong and becomes unsustainable in some way, could they fork it to POS instead

cap of 7 transaction per second

I thought it was much higher for some reason, all this exponential rise in asic work could or should allow for greater capacity then that

The tps limit is due to the current block size limit (which can be changed). ASICs do not impact the block size, they do impact the security of the network.

[redwhitenblue]

The "miner crisis" will not happen for a very long time, several years from now when block rewards half again (probably not until they half a 2nd or a 3rd time).

The "reason" for the "tx caps" is behind the technology that BTC uses to transmit transactions and the size of blocks.

Having a large number of transactions would use up a lot of bandwidth due to the nodes would need to receive and retransmit each transaction. A lot of transactions would also cause both the blockchain and individual blocks to become very long.

As of now the theoretical max miner reward (7 Tx per second times 600 seconds between blocks, assuming .0001 BTC per tx) is 0.42 BTC however the average block has much less in tx fees now so this is really not something that is an issue.

What will need to change is the incentive (or lack thereof) in running a node. If TX fees are shared with nodes (maybe 90% to miners, 10% to nodes) then there will be a larger incentive to run a node and the issue of using a lot of bandwidth will not be an issue. The blockchain would still need to be hard forked to allow for more TX per second, but the underling issue would be resolved.

[Harley997]

The miner crisis will not occur for a very long time.

Technology will cause miners to become more efficient in terms of energy consumption. As of now miners are becoming more efficient at a faster rate then block rewards are halving.

a larger number of TX's per second will eventually be a possibility. This will likely happen when then is some kind of economic incentive to host a full node.

[Justine]

The miner crisis will not occur for a very long time.

Technology will cause miners to become more efficient in terms of energy consumption. As of now miners are becoming more efficient at a faster rate then block rewards are halving.

a larger number of TX's per second will eventually be a possibility. This will likely happen when then is some kind of economic incentive to host a full node.

Technology already hit a cap on ASIC mining.

None of the miner will really have any incentive to have their miners running to confirm transaction soon.

[arbitrage001]

The miner crisis will not occur for a very long time.

Technology will cause miners to become more efficient in terms of energy consumption. As of now miners are becoming more efficient at a faster rate then block rewards are halving.

a larger number of TX's per second will eventually be a possibility. This will likely happen when then is some kind of economic incentive to host a full node.

Technology already hit a cap on ASIC mining.

None of the miner will really have any incentive to have their miners running to confirm transaction soon.

Less efficient mining machine will shut off. And less efficient mining companies such as hashfast and cointerra will disappear.

[Ron~Popeil]

Even after the last reward block mining will continue. Transaction fees on what will by then be a huge volume will keep it going. We will probably see really cheap miners in the near future as well so it will be quite profitable.

[leezay]

Even after the last reward block mining will continue. Transaction fees on what will by then be a huge volume will keep it going. We will probably see really cheap miners in the near future as well so it will be quite profitable.

Unlikely.

People will chase after profit to keep it reasonable low or negative if too many people jump in.

[jeffersonairplane]

No it would still exist for the fact that they are not mining enough to meet the demand on transactions. Personally, when BTC's rate increased the miners fee will also increase.

[Harley997]

Even after the last reward block mining will continue. Transaction fees on what will by then be a huge volume will keep it going. We will probably see really cheap miners in the near future as well so it will be quite profitable.

In order for this to happen bitcoin needs to be much more widely accepted. In order for it to be possible for a huge volume of TXs there will need to be more of an incentive to run a full node.

[ShakyhandsBTCer]

The miner crisis will not occur for a very long time.

Technology will cause miners to become more efficient in terms of energy consumption. As of now miners are becoming more efficient at a faster rate then block rewards are halving.

a larger number of TX's per second will eventually be a possibility. This will likely happen when then is some kind of economic incentive to host a full node.

Technology already hit a cap on ASIC mining.

None of the miner will really have any incentive to have their miners running to confirm transaction soon.

Less efficient mining machine will shut off. And less efficient mining companies such as hashfast and cointerra will disappear.

The hashrate of the less efficient machines is much less then the more efficient machines. In general the vast majority of the new miners brought online are more efficient machines. Look at how fast the network has grown, only this year. Late last year the difficulty was well under 1 billion, and in 6 days the difficulty is estimated to increase by ~1.4 Billion to ~13.1 billion. In other words the network is growing every two weeks at a rate that is faster then the entire network late last year.