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Is the energy use going to diminish to a halt once mining is not profitable anymore? Or is energy needed also for transactions?
by tomcooks 6y ago
Is the energy use going to diminish to a halt once mining is not profitable anymore? Or is energy needed also for transactions?
- thebean11 6y agoIf mining becomes unprofitable -> miners will drop out -> difficulty goes down -> profitability goes back up. Miners are always necessary to process transactions.
- paulgb 6y agoWhen mining is not profitable (such as just after a halving for a miner who was already on the edge of profitability), miners leave the market and the difficulty rate adjusts until the market is once again in equilibrium. Transactions do take energy, but currently only a fraction (about 1/7) of the mining reward is paid for by transaction fees alone. An interesting question is whether the network can stay secure if the difficulty drops to ~1/7th of what it is today, or whether something else will have to give. (For what it's worth, even at 1/7th of the energy use the network is still incredibly wasteful by design.)
- sp332 6y agoNot much energy is required for a transaction, but the network of legitimate miners has to have more hash power than any attacker. Once the block reward gets tiny, the profit will come from transaction fees. So it will depend on whether the users collectively get enough benefit to pay the miners. If the attackers get more hash power, the blockchain will lose legitimacy as the source of truth and the whole thing will collapse.