![](https://bitcointalk.org/Themes/custom1/images/post/xx.gif) |
June 01, 2014, 01:40:29 AM |
|
Lots of misinformation, and wild guessing in this thread, with very little acknowledgement about how bitcoin actually works.
A few people have pointed out a few pieces of the puzzle.
Yes, transaction fees will have to support the network once bitcoin stops issuing newly created bitcoins.
Yes, Bitcoins can be subdivided, so 21 Million is plenty.
The first thing to keep in mind is that we call it "mining" because those doing it are being rewarded mostly with newly created bitcoins. Essentially they are being paid through inflation. In reality, the purpose is not the creation of new bitcoins. The purpose is confirming transactions to establish a consensus on the ordering of transactions. Creation of new bitcoins is just a way to get the system up and running and a reasonably fair way to distribute the currency.
Every 4 years the amount of new bitcoins that are awarded for a solved block is cut in half (50 BTC, 25 BTC, 12.5 BTC, 6.25 BTC, etc). Meanwhile, as bitcoin gains popularity, the total value of the transaction fees increases. Since the block awards both the subsidy of new coins AND all the transaction fees of all the transactions first confirmed in the block, eventually the total fees will be more bitcoins than the new coin subsidy. At that time, perhaps people will stop calling it "mining" and start calling it "transaction processing".
The new coin subsidy will continue to shrink, and the transaction fees will therefore become a larger and larger percentage of the total block reward. Eventually (somewhere around the year 2140 when most all of us are long since dead) the block reward will shrink from 0.00000001 BTC per block to 0 BTC per block. By then, the system will have been almost entirely supported by transaction fees for several decades.
Since "transaction processors" will want to solve the block in order to get the transaction fees, pools and ASIC will almost certainly still exist. ASIC make it faster and cheaper to solve hashes, making it more likely that you will solve the block instead of some other miner. If even one "transaction processor" is running an ASIC, then every other "transaction processor" will want to run ASIC as well so they can compete for the transaction fees. If NOBODY is running any ASIC, then any miner that decides to run an ASIC will suddenly get a much larger portion of the transaction fees, since they'll suddenly solve many more blocks. If there are enough people (or companies) participating in "transaction processing", then each will only solve a block by themselves once every few months, or years. By pooling their efforts, they can make sure that blocks are solved more frequently within their pool, and then each can receive a fair share based on their hash power.
|