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But there will be a point in future where mining no longer would make sense? Curious if there are any projections when that is expected to happen.

by nikivi 6y ago

lftl 6y ago
Presumably fees will rise at that point to making profitable enough to move transactions.
- fiter 6y ago
  While I can understand the presumption that fees will rise to make it profitable to move transactions, is there any simple market mechanism for making sure transactions move safely? A slow continuous drop in hash rate could result in the network being more vulnerable to attacks.
GuB-42 6y ago
As long a s Bitcoin has value, mining will always make sense. First thing, even if the block reward is zero, there are still transactions fees. We are not here yet but they are expected to be the primary motivation in the future. Second, difficulty scale proportionally to the global mining power so that one block is mined every 10 minutes or so. As rewards decrease, the most expensive mining operations will shut down, keeping the cheaper ones profitable. An equilibrium will be found. The last point is a problem as it makes the network more centralized, potentially allowing for 51% attacks.
X6S1x6Okd1st 6y ago
Depends entirely on your operating cost and expected return. We know that the expected return from newly minted bitcoins will reach zero at some point in the future. We don't know if expected return from tx/fees will ever hit zero. TBH if it ever got back to the point where I could mine a block every couple weeks with a GPU, and I had access to a GPU, power source and internet connect I'd probably start mining again. IMO Bitcoin exists as an interesting and historical concept in too many people's minds for mining to ever stop. The real worry would be that mining drops off to the point where 51% attacks are viable on the bitcoin mainnet. We'd potentially see that if many large miners either started renting out their services to the highest bidder or sold all their miners. Once we see more hashpower for rent or purchase than goes into honest mining we have the potential for a 51% attack.

But there will be a point in future where mining no longer would make sense? Curious if there are any projections when that is expected to happen.

by nikivi 6y ago

But there will be a point in future where mining no longer would make sense? Curious if there are any projections when that is expected to happen.

lftl 6y ago

Presumably fees will rise at that point to making profitable enough to move transactions.

fiter 6y ago
While I can understand the presumption that fees will rise to make it profitable to move transactions, is there any simple market mechanism for making sure transactions move safely? A slow continuous drop in hash rate could result in the network being more vulnerable to attacks.

GuB-42 6y ago

As long a s Bitcoin has value, mining will always make sense. First thing, even if the block reward is zero, there are still transactions fees. We are not here yet but they are expected to be the primary motivation in the future. Second, difficulty scale proportionally to the global mining power so that one block is mined every 10 minutes or so. As rewards decrease, the most expensive mining operations will shut down, keeping the cheaper ones profitable. An equilibrium will be found. The last point is a problem as it makes the network more centralized, potentially allowing for 51% attacks.

X6S1x6Okd1st 6y ago

Depends entirely on your operating cost and expected return. We know that the expected return from newly minted bitcoins will reach zero at some point in the future. We don't know if expected return from tx/fees will ever hit zero. TBH if it ever got back to the point where I could mine a block every couple weeks with a GPU, and I had access to a GPU, power source and internet connect I'd probably start mining again. IMO Bitcoin exists as an interesting and historical concept in too many people's minds for mining to ever stop. The real worry would be that mining drops off to the point where 51% attacks are viable on the bitcoin mainnet. We'd potentially see that if many large miners either started renting out their services to the highest bidder or sold all their miners. Once we see more hashpower for rent or purchase than goes into honest mining we have the potential for a 51% attack.