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Author Topic: Less reward per block next year?  (Read 1492 times)
StasConstantine
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May 07, 2012, 12:27:54 AM
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Really? I just got into all this mining/bitcoin business and they are cutting rewards in half? This sucks, is there any possible way that they go up again? I'm not entirely familiar with the system and how it works..

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yogi
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May 07, 2012, 12:35:12 AM
 #2

No, block reward will half about every four years. Eventually there will be no reward and miners will be financed entirely by transaction fees.

But difficulty will adjust and this is also important for calculating mining profits.

StasConstantine
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May 07, 2012, 12:49:25 AM
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But aren't transaction fees optional?

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May 07, 2012, 12:59:34 AM
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Don't know about fees but the price of BTC should rise soon after the reduction,by how much ? Who knows Huh

Maybe to $10  Huh

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May 07, 2012, 01:04:56 AM
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they are cutting rewards in half?

They?

It is an algorithm.

But for the when, .. sometime around December 9th, plus or minus a week.
 - http://bitcointalk.org/index.php?topic=67185.0

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May 07, 2012, 01:11:05 AM
 #6

In the future miners will probably only include transactions that have at least a minimum % fee, and if you want your transaction to be processed in a reasonable amount of time you will have to pay it.

It is uncertain at this time what effect the reward drop will have on bitcoins value.

But my guess is the value will drop before hand due to this uncertainty and then rise again after.

publio
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May 07, 2012, 01:13:21 AM
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Don't know about fees but the price of BTC should rise soon after the reduction,by how much ? Who knows Huh

Maybe to $10  Huh

Care to explain your reasoning?  Huh

Foxpup
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May 07, 2012, 01:24:05 AM
 #8

But aren't transaction fees optional?

Yes, but miners processing zero-fee transactions is also optional. Wink

To elaborate, right now the block reward is so large that miners just don't care about transactions fees, and are (usually) willing to process zero-fee transactions simply because it makes no significant difference to their profit whether transaction fees are included or not. But after the block reward drops a few times, miners will start prioritising transactions with high fees (because that's where their profit is) while transactions with low or no fees get ignored.

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Fuzzy
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May 07, 2012, 01:33:37 AM
 #9

Really? I just got into all this mining/bitcoin business and they are cutting rewards in half? This sucks, is there any possible way that they go up again? I'm not entirely familiar with the system and how it works..

LOL, there's your problem right there. If you spent 30 min reading the wiki page, you'd know the block reward is set to halve every time half the remaining coins are mined. 21,000,000 / 2 = 10,500,000, right now we're at 8,949,150.

StasConstantine
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May 07, 2012, 01:38:01 AM
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How much do you think the fees will go up?

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yogi
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May 07, 2012, 01:45:27 AM
 #11

How much do you think the fees will go up?

The cost of mining is related to difficulty, so the fee will adjust to whatever people are prepared to pay.

But remember the lower the difficulty the less secure bitcoin will be.

So a better question is, how much are you prepared to pay in order to keep bitcoin secure.

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May 07, 2012, 01:56:02 AM
 #12

How much do you think the fees will go up?

The cost of mining is related to difficulty, so the fee will adjust to whatever people are prepared to pay.

But remember the lower the difficulty the less secure bitcoin will be.

So a better question is, how much are you prepared to pay in order to keep bitcoin secure.

I'm 99% certain the rules will be changed to keep miners and therefore the securers of the network online. Possibly in the form of an increased Total Coin ceiling.

I just don't see 50% of the network sticking around for the "fees".

But that's at least a decade away from becoming a real problem, there'll be other currencies by then.

Perhaps a new currency will be started that secures the BTC network while issuing it's own currency.

Man, this is gonna be interesting, can't wait.  Grin
yogi
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May 07, 2012, 02:01:52 AM
 #13

We are already paying fees.

The constant creation of coins lowers the value of all existing coins.

The only reason we don't notice this is because the number of $ invested in bitcoins is also going up.

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May 07, 2012, 02:10:24 AM
 #14

I'm 99% certain the rules will be changed to keep miners and therefore the securers of the network online. Possibly in the form of an increased Total Coin ceiling.
The rules cannot and will not change. The total number of coins cannot be increased.

I just don't see 50% of the network sticking around for the "fees".
I do. Right now, fees are about 0.1% of the block reward (at least they were last time I checked). If the fee per transaction stays the same and transaction volume increases by 1000 times, the resulting total fees will be equivalent to the current block reward. There's no problem here unless transaction volume doesn't increase enough, in which case Bitcoin is doomed anyway.

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Fuzzy
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May 07, 2012, 02:55:58 AM
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The constant creation of coins lowers the value of all existing coins.

Again, that depends on the votes of the miners and whether or not a slight decrease in value is worth the security a larger network would provide.

I'm 99% certain the rules will be changed to keep miners and therefore the securers of the network online. Possibly in the form of an increased Total Coin ceiling.
The rules cannot and will not change. The total number of coins cannot be increased.

Not sure if you're trolling, or just ignorant.

I just don't see 50% of the network sticking around for the "fees".
I do. Right now, fees are about 0.1% of the block reward (at least they were last time I checked). If the fee per transaction stays the same and transaction volume increases by 1000 times, the resulting total fees will be equivalent to the current block reward. There's no problem here unless transaction volume doesn't increase enough, in which case Bitcoin is doomed anyway.

By the time the transaction volume increases by 1000x, the number of miners will also have increased by a significant amount, reducing everyone's share of the fee.
StasConstantine
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May 07, 2012, 03:13:55 AM
 #16

From what I'm reading right now what you guys posted the only thing i see is: Market Collapse

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Graet
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May 07, 2012, 03:20:16 AM
 #17

there seems to be a misconception that in a free market the miners control the price - this is incorrect, the market determines the price. The only way miners can affect the price strongly is by dumping coins and crashing the market - sort of the opposite of what most miners desire...

there will only ever be 21million Bitcoins produced - no troll, go read some stuff before accusing ppl of ignorance
from
http://en.wikipedia.org/wiki/Bitcoin
Currency
Unlike conventional fiat currency, Bitcoin has no centralized issuing authority.[13][22][23] The network is programmed to grow the money supply as a geometric series until the total number of bitcoins reaches 21 million BTC

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Fuzzy
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May 07, 2012, 03:21:00 AM
 #18

Market Collapse

Completely possible, but being decentralized, Bitcoin is far more rooted than any Fiat currency. So regardless of how it collapses, it will always exist in some form.

That's the idea, anyway.
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May 07, 2012, 03:24:22 AM
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I'm 99% certain the rules will be changed to keep miners and therefore the securers of the network online. Possibly in the form of an increased Total Coin ceiling.
The rules cannot and will not change. The total number of coins cannot be increased.
Not sure if you're trolling, or just ignorant.
there will only ever be 21million Bitcoins produced - no troll, go read some stuff before accusing ppl of ignorance

Never said there would be. But the rules of bitcoin can be changed, whether you like it or not.
StasConstantine
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May 07, 2012, 03:25:20 AM
 #20

is there any way to remove the 21 million limit? it would be cooler if the limit was somehow tied with the ammount of users using bitcoin, or ammount of transactions there were in past few blocks, or something like that

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