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Without a backlog of high fee paying transactions, Bitcoin mining becomes unstable in the long term when block subsidy dwindles to insignificance, as discussed

• __blockcipher__ 6y ago
  This issue resolves itself. Miners will refuse to uptake transactions into blocks that pay insufficient fees. There's no need to arbitrarily force $80+ transaction fees. As a review for anyone reading, miners are compensated via the block reward - a direct grant of Bitcoin to the miner - as well as transaction fees for any transactions they decide to include in their block. (The person who mines the block gets to unilaterally decide which transactions go in the block; functionally this means they just sort in descending order of $/kb and include as many as they can)
• Paul-E 6y ago
  The paper that relies on turns out to have some inaccurate assumptions. The paper assumes that miners can flip their hardware on/off at essentially instantaneous intervals. The assume this to argue that miners will strategically turn their hardware off when the expected value of mining a block drops below the cost of power. It turns out that many of the big miners have long term contracts with power companies to consumer power; they wouldn't save money by turning their hardware off for short periods of time. Power companies like this arrangement because it lets them predict demand better, and miners like it because they get "bulk rates" on electricity for being predictable in their consumption. The arrangement falls apart when miners turn their hardware on and off.