Bitcoin Forum
December 08, 2016, 08:07:37 AM *
News: To be able to use the next phase of the beta forum software, please ensure that your email address is correct/functional.
 
   Home   Help Search Donate Login Register  
Pages: [1]
  Print  
Author Topic: How will transactions be validated when blocks are no longer produced?  (Read 1056 times)
schnell
Sr. Member
****
Offline Offline

Activity: 266


View Profile
March 07, 2012, 06:04:32 PM
 #1

If miners confirm transactions, what will happen when there are none of them?
1481184457
Hero Member
*
Offline Offline

Posts: 1481184457

View Profile Personal Message (Offline)

Ignore
1481184457
Reply with quote  #2

1481184457
Report to moderator
1481184457
Hero Member
*
Offline Offline

Posts: 1481184457

View Profile Personal Message (Offline)

Ignore
1481184457
Reply with quote  #2

1481184457
Report to moderator
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
1481184457
Hero Member
*
Offline Offline

Posts: 1481184457

View Profile Personal Message (Offline)

Ignore
1481184457
Reply with quote  #2

1481184457
Report to moderator
1481184457
Hero Member
*
Offline Offline

Posts: 1481184457

View Profile Personal Message (Offline)

Ignore
1481184457
Reply with quote  #2

1481184457
Report to moderator
1481184457
Hero Member
*
Offline Offline

Posts: 1481184457

View Profile Personal Message (Offline)

Ignore
1481184457
Reply with quote  #2

1481184457
Report to moderator
DeathAndTaxes
Donator
Legendary
*
Offline Offline

Activity: 1218


Gerald Davis


View Profile
March 07, 2012, 06:07:14 PM
 #2

There will always be miners and there will always be blocks.

Mining doesn't end.  If it does then Bitcoin is gone.

Block SUBSIDIES decline by roughly 50% every 4 years.

I hate the term mining because it de-emphizes the purpose.

Bitcoin isn't designed so that the purpose of mining is to get coins.

The purpose of mining is to protect the network, validate transactions, and prevent double spends.
Obviously this has a cost so to encourage people to do that miners get paid transaction fees.
Transactions fees will be low when network is young so the network pays miners a subsidy on top of the transaction fees they collect.
FreeMoney
Legendary
*
Offline Offline

Activity: 1246


Strength in numbers


View Profile WWW
March 07, 2012, 06:07:37 PM
 #3

Blocks will always be produced, it's just that in 130 years they won't get any NEW coins. They'll be rewarded only by transaction fees.

Play Bitcoin Poker at sealswithclubs.eu. We're active and open to everyone.
Piper67
Legendary
*
Offline Offline

Activity: 1008



View Profile
March 07, 2012, 06:09:41 PM
 #4

If miners confirm transactions, what will happen when there are none of them?

Konichua, blocks will always be produced and added to the block chain. What will slowly reduce to almost zero (though not quite reaching it) is the reward of coins per block solved. The idea is that by the time that reward drops to something tiny, like one BTC or so, the value of BTC will be such that even the small transaction fees will be incentive enough for the miners to keep on solving blocks.

They're not really "mining", you know  Cheesy
DeathAndTaxes
Donator
Legendary
*
Offline Offline

Activity: 1218


Gerald Davis


View Profile
March 07, 2012, 06:11:08 PM
 #5

If miners confirm transactions, what will happen when there are none of them?

Konichua, blocks will always be produced and added to the block chain. What will slowly reduce to almost zero (though not quite reaching it) is the reward of coins per block solved. The idea is that by the time that reward drops to something tiny, like one BTC or so, the value of BTC will be such that even the small transaction fees will be incentive enough for the miners to keep on solving blocks.

They're not really "mining", you know  Cheesy

One correction the subsidy will go to zero.  Bitcoin has no concept of infinite fractions.  All values are stored as integers of the smallest discrete unit, 1 satoshi = 1E-8 BTC. Eventually the subsidy will be less than 0.00000001 when rounded down at which point the subsidy will be exactly 0 for all future blocks however that will take over one hundred years. Smiley
notme
Legendary
*
Offline Offline

Activity: 1526


View Profile
March 07, 2012, 06:12:27 PM
 #6

They're not really "mining", you know  Cheesy

I prefer "Transaction Processing".

https://www.bitcoin.org/bitcoin.pdf
While no idea is perfect, some ideas are useful.
12jh3odyAAaR2XedPKZNCR4X4sebuotQzN
Piper67
Legendary
*
Offline Offline

Activity: 1008



View Profile
March 07, 2012, 06:13:07 PM
 #7

If miners confirm transactions, what will happen when there are none of them?

Konichua, blocks will always be produced and added to the block chain. What will slowly reduce to almost zero (though not quite reaching it) is the reward of coins per block solved. The idea is that by the time that reward drops to something tiny, like one BTC or so, the value of BTC will be such that even the small transaction fees will be incentive enough for the miners to keep on solving blocks.

They're not really "mining", you know  Cheesy

One correction the subsidy will go to zero.  Bitcoin has no concept of infinite fractions it rounds the subsidy down to the nearest satoshi. 1E-8 BTC.  Eventually the subsidy will be less than 0.00000001 when rounded down at which point the subsidy will be exactly 0 for all future blocks.

True, but I was hoping that by then we'll be forced to go down to 1E-12 or so just because a satoshi will be worth too much  Grin
DeathAndTaxes
Donator
Legendary
*
Offline Offline

Activity: 1218


Gerald Davis


View Profile
March 07, 2012, 06:18:58 PM
 #8

True, but I was hoping that by then we'll be forced to go down to 1E-12 or so just because a satoshi will be worth too much  Grin

Well even then there is a deadline it just gets pushed back every time the discrete unit is made smaller.

Still global money supply is ~$60T.  If the entire world adopted Bitcoin for all transactions displacing all other forms of money 1 Bitcoin would be $60T / 21M = ~$3 million ea.  1 Satoshi would then be ~ 3 cents.  Unlikely we will ever need more than 8 decimal places unless a significant number of them were lost.
wachtwoord
Legendary
*
Offline Offline

Activity: 1484



View Profile WWW
March 07, 2012, 06:21:44 PM
 #9

1 Bitcoin would be $60T / 21M = ~$3 million ea. 

All in favor say 'Aye' Wink

schnell
Sr. Member
****
Offline Offline

Activity: 266


View Profile
March 07, 2012, 06:22:22 PM
 #10

1 Bitcoin would be $60T / 21M = ~$3 million ea.

All in favor say 'Aye' Wink
aye!

Oh, I thought transactions only went through when the blok went through.
So you are saying that even when mining is almost impossible, you will still be able to run a rig and collect fees?
notme
Legendary
*
Offline Offline

Activity: 1526


View Profile
March 07, 2012, 06:24:34 PM
 #11

1 Bitcoin would be $60T / 21M = ~$3 million ea.

All in favor say 'Aye' Wink
aye!

Oh, I thought transactions only went through when the blok went through.
So you are saying that even when mining is almost impossible, you will still be able to run a rig and collect fees?

Difficulty and the subsidy have no formal relationship.  Subsidy will effect difficulty, but the subsidy halving doesn't increase the difficulty.  If anything, it will decrease it.

See:  http://www.bitcoin.org/bitcoin.pdf if you aren't scared of Math.

https://www.bitcoin.org/bitcoin.pdf
While no idea is perfect, some ideas are useful.
12jh3odyAAaR2XedPKZNCR4X4sebuotQzN
schnell
Sr. Member
****
Offline Offline

Activity: 266


View Profile
March 07, 2012, 06:25:32 PM
 #12

1 Bitcoin would be $60T / 21M = ~$3 million ea.

All in favor say 'Aye' Wink
aye!

Oh, I thought transactions only went through when the blok went through.
So you are saying that even when mining is almost impossible, you will still be able to run a rig and collect fees?

Difficulty and the subsidy have no formal relationship.  Subsidy will effect difficulty, but the subsidy halving doesn't increase the difficulty.  If anything, it will decrease it.

See:  http://www.bitcoin.org/bitcoin.pdf if you aren't scared of Math.

Thanks Smiley
Bitcoin noob here .-.
check_status
Full Member
***
Offline Offline

Activity: 196


Web Dev, Db Admin, Computer Technician


View Profile
March 07, 2012, 09:20:28 PM
 #13

True, but I was hoping that by then we'll be forced to go down to 1E-12 or so just because a satoshi will be worth too much  Grin

Well even then there is a deadline it just gets pushed back every time the discrete unit is made smaller.

Still global money supply is ~$60T.  If the entire world adopted Bitcoin for all transactions displacing all other forms of money 1 Bitcoin would be $60T / 21M = ~$3 million ea.  1 Satoshi would then be ~ 3 cents.  Unlikely we will ever need more than 8 decimal places unless a significant number of them were lost.
You guys are working on the theory in my sig. sweet.

@DeathAndTaxes
How did you arrive at your 60T number?
I went with Wiki answers. http://wiki.answers.com/Q/What_is_the_total_amount_of_money_in_the_world
Everyone else seems to not answer this question.

I think it would be over 60T with just US, UK, EU, China, Russia, Japan and California. Grin

For Bitcoin to be a true global currency the value of BTC needs always to rise.
If BTC became the global currency & money supply = 100 Trillion then ⊅1.00 BTC = $4,761,904.76.
P2Pool Server List | How To's and Guides Mega List |  1EndfedSryGUZK9sPrdvxHntYzv2EBexGA
DeathAndTaxes
Donator
Legendary
*
Offline Offline

Activity: 1218


Gerald Davis


View Profile
March 07, 2012, 09:26:38 PM
 #14

Just a quick google search.  Not sure how accurate it is but needed some figure.

http://news.goldseek.com/GoldSeek/1231778551.php

Watch out it is a goldbug site.  Then again one would image that if they are off it would be too high not too low.

Still 60T, 100T, 50T, 180T we are talking a magnitude on the order of 1 BTC = millions and 1 satoshi = single cents.
casascius
Mike Caldwell
VIP
Legendary
*
Offline Offline

Activity: 1344


The Casascius 1oz 10BTC Silver Round (w/ Gold B)


View Profile WWW
March 07, 2012, 09:26:46 PM
 #15

I, and several others, have voiced concerns that transaction fees will not sustain mining, arguing that there is no market force that will hold transaction fees high enough to support mining.  Those who have voiced this concern (including me) predict that in the absence of an incentive to mine, people will just stop mining and the difficulty (and thus the security of the network) will become very low.  After all, it doesn't take any particular amount of hash power to process transactions.

Ever since seeing merged mining for Namecoin, I realized one possibility that could practically solve this problem, to the extent it really exists.  If this becomes a problem, people will start their own block chain (this idea has been dubbed "inflatacoin") that has a never-ending block reward.  Many people will start accepting "inflatacoin", and many others will refuse to do so.  Regardless of how partisan it gets, if Bitcoin stops seeing mining because miners have no incentive to mine, imagine merged mining where Bitcoin benefits from the mining done on "inflatacoin".

Companies claiming they got hacked and lost your coins sounds like fraud so perfect it could be called fashionable.  I never believe them.  If I ever experience the misfortune of a real intrusion, I declare I have been honest about the way I have managed the keys in Casascius Coins.  I maintain no ability to recover or reproduce the keys, not even under limitless duress or total intrusion.  Remember that trusting strangers with your coins without any recourse is, as a matter of principle, not a best practice.  Don't keep coins online. Use paper wallets instead.
DeathAndTaxes
Donator
Legendary
*
Offline Offline

Activity: 1218


Gerald Davis


View Profile
March 07, 2012, 09:39:43 PM
 #16

I, and several others, have voiced concerns that transaction fees will not sustain mining, arguing that there is no market force that will hold transaction fees high enough to support mining.  Those who have voiced this concern (including me) predict that in the absence of an incentive to mine, people will just stop mining and the difficulty (and thus the security of the network) will become very low.  After all, it doesn't take any particular amount of hash power to process transactions.

Ever since seeing merged mining for Namecoin, I realized one possibility that could practically solve this problem, to the extent it really exists.  If this becomes a problem, people will start their own block chain (this idea has been dubbed "inflatacoin") that has a never-ending block reward.  Many people will start accepting "inflatacoin", and many others will refuse to do so.  Regardless of how partisan it gets, if Bitcoin stops seeing mining because miners have no incentive to mine, imagine merged mining where Bitcoin benefits from the mining done on "inflatacoin".

I think some protocol changes will required to create a functional "fee economy" that doesn't mean it will be impossible and hashrate is artificially high now compared to the real economic activity so we likely have some time (at least 2 subsidy cuts).

The main issue of fees is
1) The block difficulty is not based on the # of transactions.
2) The block has is very difficult but processing a transaction is negigible.
3) Miners thus have an incentive to include any paying transaction.
4) If minimum fee is 1 satoshi then there is no incentive for someone to pay more.

Fees aproach 1 satoshi * # of transactions per year and difficult/hashrate follow that.

In a new block chain the preferred solution to that dynamic would be smart to increase the difficulty of the block by the number of transactions (or maybe value of inputs) thus creating a link between block generation and cost of transactions.  So requires difficulty becomes base difficulty (based on block time) * multiplier (based on value of transactions).  If this multiplier was non-linear it would create some dynamics to pricing.

For Bitcoin a breaking change like that is simply not possible, however even something like setting a min fee of 0.1 BTC or 0.1% of inputs whichever is greater would be useful.  It would set a floor.  Any transaction wee a fee smaller than min is invalid and rejected by the network.  One could still broadcast NO FEE transactions just no artificially low fees.
check_status
Full Member
***
Offline Offline

Activity: 196


Web Dev, Db Admin, Computer Technician


View Profile
April 19, 2012, 09:14:37 AM
 #17

True, but I was hoping that by then we'll be forced to go down to 1E-12 or so just because a satoshi will be worth too much  Grin

Well even then there is a deadline it just gets pushed back every time the discrete unit is made smaller.

Still global money supply is ~$60T.  If the entire world adopted Bitcoin for all transactions displacing all other forms of money 1 Bitcoin would be $60T / 21M = ~$3 million ea.  1 Satoshi would then be ~ 3 cents.  Unlikely we will ever need more than 8 decimal places unless a significant number of them were lost.
Currently wealth is concentrated in specific regions of the world, US, UK, parts of EU, South Africa, etc. So your $60T figure is mostly linked to those wealthy geographic/population regions. In a one world government scenario new wealth will be created in areas that were previously unable to obtain the level the US, UK, parts of EU, South Africa, etc. enjoyed. It is my opinion that the $60T figure will grow, potentially to $500T (WAG), and in such a scenario Bitcoin would need at least 12 decimal places to be able to become in actuality the world currency. How many decimal places would be required would be dependent on how best to fit both micro and macro payments into Bitcoin.

For Bitcoin to be a true global currency the value of BTC needs always to rise.
If BTC became the global currency & money supply = 100 Trillion then ⊅1.00 BTC = $4,761,904.76.
P2Pool Server List | How To's and Guides Mega List |  1EndfedSryGUZK9sPrdvxHntYzv2EBexGA
arby
Donator
Member
*
Offline Offline

Activity: 112


keybase.io/arblarg


View Profile
April 19, 2012, 09:45:13 AM
 #18

very interesting knowlegde, thanks guys, i was about to ask the same question

Jabber/XMPP: arby@darkness.su
caveden
Legendary
*
Offline Offline

Activity: 1106



View Profile
April 19, 2012, 10:10:51 AM
 #19

True, but I was hoping that by then we'll be forced to go down to 1E-12 or so just because a satoshi will be worth too much  Grin

As the subsidy halves each ~4 years, for your assumption to hold the price of one bitcoin would have to double every 4 years. I would love it, but I don't believe we can expect it to happen "forever". Smiley

18rZYyWcafwD86xvLrfuxWG5xEMMWUtVkL
Nyaaan
Full Member
***
Offline Offline

Activity: 140


View Profile WWW
April 19, 2012, 10:16:40 AM
 #20

Don't worry bro, it won't happen anytime soon.
Maybe in 100 years.
Pages: [1]
  Print  
 
Jump to:  

Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!