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The age old debate about what happens when mining ends? When does mining end?

latchkey 4y ago
Mining never ends, but the inflationary aspect does [0]. At which point, bitcoin will become unprofitable for most miners and they will shut down. A few who can remain profitable, from the transaction fees alone, will stick around and the end result is that energy usage will drop significantly. Unless, of course, miners vote in another consensus model before then (unlikely). This is a big reason why there is such a huge land grab of new miners coming online right now and a huge increase in power usage. It also solidifies the monetary policy imho. Once emissions stop, it'll become even harder to obtain what BTC is left and as long as it stays desirable for its intrinsic value (imho, that is digital gold... its store of value), people will want it. Don't forget that while 19m have been emitted, millions of that are locked up forever and will continue to get locked up over time (things like people who die suddenly without leaving access to their private keys). Thus, there is actually a lot less than 21m BTC that'll ever be available. ͡° ͜ʖ ͡° at the halving chart on that website. I usually don't think that past performance indicated future results... but come on... this is just obvious financial cycles. If you haven't already, you'd do well to buy $100 of bitcoin and just sit on it. [0] https://www.bitcoinblockhalf.com/ https://www.bitcoinblockhalf.com/
- betwixthewires 4y ago
  OK, you mean when the creation of new bitcoin ends. No, that's not what the article is about. The article basically says any cryptocurrency that relies on mining cannot be a store of value because mining requires capital outflow which means your bitcoin loses value without continued capital inflow in the form of new demand. It is very likely miners vote in another consensus. There are ~118 years left before the supply capnis reached. If bitcoin lasts that long, it is highly likely that some major changes occur, consensus seems like the number 1 candidate for change. The end result of energy usage dropping... if the energy usage drops, the security does also. So price decrease results in less mining, and therefore less capital outflow, which is great, except it results in less security. the only way to get 0 capital outflow (and therefore require 0 capital inflow to keep a steady price) is to have 0 mining, which means no blocks being produced and no security, which again, does not make a good store of value.
  - latchkey 4y ago
    > The article basically says any cryptocurrency that relies on mining cannot be a store of value because mining requires capital outflow which means your bitcoin loses value without continued capital inflow in the form of new demand. Sorry, but you have to make the distinction between mining and inflation. Two different things. Mining is just validating transactions. Today, miners get paid newly minted coin + fees for that service. In the future, they will only get fees. You have to factor that into the long term viability of the coin. After just watching ETH literally destroy GPU mining, I don't think it'll be that easy for Bitcoin to achieve any sort of changes that affect mining in any way. Yes, there are 118 years to 21m, but the supply is dwindling... 6.25 now... next 3.125... and the difficulty keeps going up. Did you ͡° ͜ʖ ͡° at the link I sent? It has a nice graph of the decline of inflation... we are super close to zero by just 2029 and 2033... even closer. > The end result of energy usage dropping... if the energy usage drops, the security does also. Untrue. Difficulty adjusts automatically. The ONLY issue is if a huge amount of hash drops off... and then rejoins... together... all at once... in a way to attack the network. But the economics of doing would negate that pretty quickly. > the only way to get 0 capital outflow (and therefore require 0 capital inflow to keep a steady price) is to have 0 mining No... we are going to get to near 0 capital outflow by 2033. We will always need mining to form blocks. The question is what will happen to the fees, and the price. Fees are a function of usage and a minimum set by the miners as a whole. There will always be miners willing to form blocks for almost no fee. If there is little usage, the fees will stay low, but demand of the coin as a store of value, should drive the price up due to the fixed supply and lack of availability.
    - betwixthewires 4y ago
      I don't think you understand this stuff as well as you think you do. That's not intended as a rib, it's important for us to continue learning. The hash difficulty adjusting automatically keeps the block time relatively constant. Security goes down the less hash power is on the network, that's an undisputed fact. Hash power is proportional to energy consumption. Lower energy consumption means less hash power means less security. Think of it like this: if 2 CPUs secured bitcoin, it is trivial to attack. How much hash power and energy an attacker has to buy for a successful attack is the security of the network. You don't have to factor in the distinction between emission (commonly called inflation) and fees when discussing this particular topic, any bitcoin liquidated to pay for energy usage is mathematically identical to price inflation when looking at BTC as a currency. It is sell pressure, it is capital outflow. Emission of new bitcoin, or inflation as it is commonly called, is not the same as capital outflow. Capital outflow is sell pressure. You cannot get to 0 capital outflow as long as miners must pay for power. Do you understand what I'm saying? This has nothing to do with how many new bitcoins are created. Please try to understand what I'm telling you. We aren't talking about the usual everybody-has-heard-it-a-million-times bitcoin critiques. I am very, very familiar with how bitcoin works and understand very much all the points you're making. But these things have no bearing on what I or the article are saying.

Mining never ends, but the inflationary aspect does [0]. At which point, bitcoin will become unprofitable for most miners and they will shut down. A few who can remain profitable, from the transaction fees alone, will stick around and the end result is that energy usage will drop significantly. Unless, of course, miners vote in another consensus model before then (unlikely). This is a big reason why there is such a huge land grab of new miners coming online right now and a huge increase in power usage. It also solidifies the monetary policy imho. Once emissions stop, it'll become even harder to obtain what BTC is left and as long as it stays desirable for its intrinsic value (imho, that is digital gold... its store of value), people will want it. Don't forget that while 19m have been emitted, millions of that are locked up forever and will continue to get locked up over time (things like people who die suddenly without leaving access to their private keys). Thus, there is actually a lot less than 21m BTC that'll ever be available. ͡° ͜ʖ ͡° at the halving chart on that website. I usually don't think that past performance indicated future results... but come on... this is just obvious financial cycles. If you haven't already, you'd do well to buy $100 of bitcoin and just sit on it. [0] https://www.bitcoinblockhalf.com/ https://www.bitcoinblockhalf.com/

betwixthewires 4y ago
OK, you mean when the creation of new bitcoin ends. No, that's not what the article is about. The article basically says any cryptocurrency that relies on mining cannot be a store of value because mining requires capital outflow which means your bitcoin loses value without continued capital inflow in the form of new demand. It is very likely miners vote in another consensus. There are ~118 years left before the supply capnis reached. If bitcoin lasts that long, it is highly likely that some major changes occur, consensus seems like the number 1 candidate for change. The end result of energy usage dropping... if the energy usage drops, the security does also. So price decrease results in less mining, and therefore less capital outflow, which is great, except it results in less security. the only way to get 0 capital outflow (and therefore require 0 capital inflow to keep a steady price) is to have 0 mining, which means no blocks being produced and no security, which again, does not make a good store of value.
- latchkey 4y ago
  > The article basically says any cryptocurrency that relies on mining cannot be a store of value because mining requires capital outflow which means your bitcoin loses value without continued capital inflow in the form of new demand. Sorry, but you have to make the distinction between mining and inflation. Two different things. Mining is just validating transactions. Today, miners get paid newly minted coin + fees for that service. In the future, they will only get fees. You have to factor that into the long term viability of the coin. After just watching ETH literally destroy GPU mining, I don't think it'll be that easy for Bitcoin to achieve any sort of changes that affect mining in any way. Yes, there are 118 years to 21m, but the supply is dwindling... 6.25 now... next 3.125... and the difficulty keeps going up. Did you ͡° ͜ʖ ͡° at the link I sent? It has a nice graph of the decline of inflation... we are super close to zero by just 2029 and 2033... even closer. > The end result of energy usage dropping... if the energy usage drops, the security does also. Untrue. Difficulty adjusts automatically. The ONLY issue is if a huge amount of hash drops off... and then rejoins... together... all at once... in a way to attack the network. But the economics of doing would negate that pretty quickly. > the only way to get 0 capital outflow (and therefore require 0 capital inflow to keep a steady price) is to have 0 mining No... we are going to get to near 0 capital outflow by 2033. We will always need mining to form blocks. The question is what will happen to the fees, and the price. Fees are a function of usage and a minimum set by the miners as a whole. There will always be miners willing to form blocks for almost no fee. If there is little usage, the fees will stay low, but demand of the coin as a store of value, should drive the price up due to the fixed supply and lack of availability.
  - betwixthewires 4y ago
    I don't think you understand this stuff as well as you think you do. That's not intended as a rib, it's important for us to continue learning. The hash difficulty adjusting automatically keeps the block time relatively constant. Security goes down the less hash power is on the network, that's an undisputed fact. Hash power is proportional to energy consumption. Lower energy consumption means less hash power means less security. Think of it like this: if 2 CPUs secured bitcoin, it is trivial to attack. How much hash power and energy an attacker has to buy for a successful attack is the security of the network. You don't have to factor in the distinction between emission (commonly called inflation) and fees when discussing this particular topic, any bitcoin liquidated to pay for energy usage is mathematically identical to price inflation when looking at BTC as a currency. It is sell pressure, it is capital outflow. Emission of new bitcoin, or inflation as it is commonly called, is not the same as capital outflow. Capital outflow is sell pressure. You cannot get to 0 capital outflow as long as miners must pay for power. Do you understand what I'm saying? This has nothing to do with how many new bitcoins are created. Please try to understand what I'm telling you. We aren't talking about the usual everybody-has-heard-it-a-million-times bitcoin critiques. I am very, very familiar with how bitcoin works and understand very much all the points you're making. But these things have no bearing on what I or the article are saying.