Reduced number of miners and blockchain health?

[cafucafucafu]

As time progresses, the incentive to mine will reduce. So this will have negative consequences on the health of the network. Is there any solution for this?

[DannyHamilton]

As time progresses, the incentive to mine will reduce. So this will have negative consequences on the health of the network. Is there any solution for this?

Yes.  It has already been implemented.

It's called: "transaction fees".

[cafucafucafu]

As time progresses, the incentive to mine will reduce. So this will have negative consequences on the health of the network. Is there any solution for this?

Yes.  It has already been implemented.

It's called: "transaction fees".

This is what I have heard but it seems like miners are suffering even right now.

[cafucafucafu]

As time progresses, the incentive to mine will reduce.

What if Bitcoin adoption continues to grow and transaction fees overtake the block subsidy?

Nice answer. Much appreciated.

[DannyHamilton]

As time progresses, the incentive to mine will reduce. So this will have negative consequences on the health of the network. Is there any solution for this?

Yes.  It has already been implemented.

It's called: "transaction fees".

This is what I have heard but it seems like miners are suffering even right now.

The only miners that are suffering right now are the miners that don't have access to cheap enough resources.

This is the way a market works.  Mining will migrate over time to the miner that have the best access to the cheapest necessary resources, since they will be able to maintain profitability while the less profitable miners move on to other businesses.

[cafucafucafu]

As time progresses, the incentive to mine will reduce. So this will have negative consequences on the health of the network. Is there any solution for this?

Yes.  It has already been implemented.

It's called: "transaction fees".

This is what I have heard but it seems like miners are suffering even right now.

The only miners that are suffering right now are the miners that don't have access to cheap enough resources.

This is the way a market works.  Mining will migrate over time to the miner that have the best access to the cheapest necessary resources, since they will be able to maintain profitability while the less profitable miners move on to other businesses.

Meaning -> more centralization with more powerful entities who can afford those resources?

[cryptworld]

more use -> more transactions -> more fees
besides mining machines evolve to be more efficient

[Melbustus]

Read the whitepaper: http://bitcoin.org/bitcoin.pdf

Section 6 - Incentives. Mentions transactions fees.


Then read the original crypto-mailing list thread: http://www.mail-archive.com/cryptography%40metzdowd.com/msg09964.html

Everyone interested in bitcoin should read this stuff as background. It's important to understand the scope of issues that were discussed, debated, and designed in since even BEFORE the first bitcoin node was fired up on Jan 3rd 2009. All of the above material is from late 2008.

There has also obviously been a ton of discussion on these issues on this forum too, but I still find those original discussions valuable to this day.

[franky1]

As time progresses, the incentive to mine will reduce. So this will have negative consequences on the health of the network. Is there any solution for this?

yep, for the next 15 years here is the solution:

What if 12.5 bitcoins are worth more in the future than 25 bitcoins are worth today?

even after 15 years, the solution has been thought about:

Yes.  It has already been implemented.

It's called: "transaction fees".

there is a period of transition where bitcoins price will grown over the next 15 years to compensate. EG when bitcoins price doubles, its the same as the bitcoin price not doubling and not halving.. eg $8k value is still $8k value right now.. but in the future 12.5btc will be worth a hell of a lot more than $8k

This is what I have heard but it seems like miners are suffering even right now.

thats because miners have stupid mindsets to sell at a loss.. shooting themselves in the foot. if the shrimp continue shooting themselves in the foot they wont make the next steps of bitcoins evolution.
leaving only the smart miners to continue.

[DannyHamilton]

Meaning -> more centralization with more powerful entities who can afford those resources?

Yes.

This is the intended design of bitcoin.  Did you think otherwise?

Satoshi said so himself very early on:

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most users should start running client-only software and only the specialist server farms keep running full network nodes, kind of like how the usenet network has consolidated.
- snip -

- snip -
I anticipate there will never be more than 100K nodes, probably less.  It will reach an equilibrium where it's not worth it for more nodes to join in.  The rest will be lightweight clients, which could be millions.

At equilibrium size, many nodes will be server farms with one or two network nodes that feed the rest of the farm over a LAN.

The current system where every user is a network node is not the intended configuration for large scale.  That would be like every Usenet user runs their own NNTP server.  The design supports letting users just be users.  The more burden it is to run a node, the fewer nodes there will be.  Those few nodes will be big server farms.  The rest will be client nodes that only do transactions and don't generate.
- snip -

[Eisenhower34]

Meaning -> more centralization with more powerful entities who can afford those resources?

Yes.

This is the intended design of bitcoin.  Did you think otherwise?

Satoshi said so himself very early on:

- snip -
most users should start running client-only software and only the specialist server farms keep running full network nodes, kind of like how the usenet network has consolidated.
- snip -

- snip -
I anticipate there will never be more than 100K nodes, probably less.  It will reach an equilibrium where it's not worth it for more nodes to join in.  The rest will be lightweight clients, which could be millions.

At equilibrium size, many nodes will be server farms with one or two network nodes that feed the rest of the farm over a LAN.

The current system where every user is a network node is not the intended configuration for large scale.  That would be like every Usenet user runs their own NNTP server.  The design supports letting users just be users.  The more burden it is to run a node, the fewer nodes there will be.  Those few nodes will be big server farms.  The rest will be client nodes that only do transactions and don't generate.
- snip -

For some reason people tend to want bitcoin to be as decentralized as possible. They also think that every aspect of their life should be decentralized (like wanting the bitcoin community to vote on what they should wear every morning).

Having mining be somewhat centralized is not a bad thing and is probably a good thing as if these central pools are honest then it will be more difficult for a bad actor to pretend to be many smaller miners and attack the network

[Billbags]

^ People do not realize how well thought every aspect of Bitcoin is. The knowledge of history, game theory, encryption, economics, finance, programming and law that was required to create Bitcoin is so amazing. The more I learn about bitcoin, the more I have to redeploy further in education. I just finished some of Adam Mullers work. Who would have thought at my old age I would be studying so much and learning about things like HyperMoney to understand Bitcoin better.