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> I don't understand how it'd work out: too little BTCs rewarded per block The math only works out if value of bitcoin continues to increase in value, at least

by phire 3y ago

> I don't understand how it'd work out: too little BTCs rewarded per block The math only works out if value of bitcoin continues to increase in value, at least a constant 25% annual return, year after year (on top of inflation). If the price of bitcoin ever stabilises (or worse, drops) over the long term, then the security of bitcoin will go down, until eventually it becomes viable for someone to launch a 51% attack.

tromp 3y ago
Instead the security will rely on maintaining a large backlog of high fee paying transactions.
greyface- 3y ago
100% return over 4 years refigured as constant annual return is 19%, not 25%, due to compounding.
woleium 3y ago
difficulty also updates every couple of weeks. less folk mining means less energy per coin mined
- phire 3y ago
  Yeah, the amount of energy per coin mined kind of follows the price of the coin (in the longer term, not so much in the short term). So the price going down is great news for anyone concerned about energy conservation, but because the amount of energy wasted is directly correlated to the difficulty of launching a 51% attack, the energy usage going down is bad news for anyone actually using bitcoin.
  - woleium 3y ago
    The energy is not wasted, its used to sustain the system. Similarly the energy used to power inactive pos systems is used to sustain the system for immediate use when needed.
npoc 3y ago
You're forgetting the transaction fees. Not only is the number of bitcoin hard capped, but also the transaction rate. As the network stores more and more value, the demand for transactions increases against a fixed supply, driving fees higher. The fees are independent of transaction amount, so what looks like high fees to someone transferring $1000 - let's say $50 fee - will be extremely cheap for someone transferring $1,000,000,000 (when you consider it includes final settlement, and loss-less storage of value for eternity). By 2140 all of the miners income will come from transaction fees, by which time the base layer will likely be transferring millions and billions of dollars worth of value in each transaction.

by phire 3y ago

tromp 3y ago

Instead the security will rely on maintaining a large backlog of high fee paying transactions.

greyface- 3y ago

100% return over 4 years refigured as constant annual return is 19%, not 25%, due to compounding.

woleium 3y ago

difficulty also updates every couple of weeks. less folk mining means less energy per coin mined

phire 3y ago
Yeah, the amount of energy per coin mined kind of follows the price of the coin (in the longer term, not so much in the short term). So the price going down is great news for anyone concerned about energy conservation, but because the amount of energy wasted is directly correlated to the difficulty of launching a 51% attack, the energy usage going down is bad news for anyone actually using bitcoin.
- woleium 3y ago
  The energy is not wasted, its used to sustain the system. Similarly the energy used to power inactive pos systems is used to sustain the system for immediate use when needed.

npoc 3y ago

You're forgetting the transaction fees. Not only is the number of bitcoin hard capped, but also the transaction rate. As the network stores more and more value, the demand for transactions increases against a fixed supply, driving fees higher. The fees are independent of transaction amount, so what looks like high fees to someone transferring $1000 - let's say $50 fee - will be extremely cheap for someone transferring $1,000,000,000 (when you consider it includes final settlement, and loss-less storage of value for eternity). By 2140 all of the miners income will come from transaction fees, by which time the base layer will likely be transferring millions and billions of dollars worth of value in each transaction.