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> PoW miners tend to spend more and more resources on finding blocks, until the cost approaches the rewards. But the rewards go up as the cryptocurrency becomes
by drexlspivey 5y ago
> PoW miners tend to spend more and more resources on finding blocks, until the cost approaches the rewards. But the rewards go up as the cryptocurrency becomes more popular, because the price and transaction fees go up. Therefore, a PoW cryptocurrency tends to "eat the world" as it becomes bigger.
It’s actually the opposite since the block reward goes down over time
- akhosravian 5y ago> It’s actually the opposite since the block reward goes down over time It is true that 10 years ago block rewards were almost 10x what they are today in terms of BTC, but by USD value new rewards are worth several orders of magnitude more today.
- drexlspivey 5y agoThe block reward approaches zero so no matter what the price is in the future it will amount to zero at the end.
- earthtolazlo 5y agoBy 2140.
- WA 5y agoIf the price goes up, you can spend more resources to mine a block. But the cost will approach the reward.
- wcoenen 5y ago> It’s actually the opposite since the block reward goes down over time See history of block reward in dollars[1]. This the miner's collective budget to find blocks. It's about 350K USD per 10 minutes now, or 2.1M USD/hour. Pick an industrial electricity price, say 0.05 USD/kWh. That budget will then buy 42 GWh/hour, or 42 gigawatt of power continuously (roughly 2% of global power consumption). Of course, miners have other costs, and their growth is lagging this ceiling. But it gives you an idea. That's why I think we're heading for overshoot, and future block reward halvings will come too late. [1] https://bitcoinvisuals.com/chain-block-reward https://bitcoinvisuals.com/chain-block-reward