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Maybe this is a stupid question, but why is the mining needed at all? If we can keep subdividing them, shouldn't 1 bitcoin theoretically be sufficient?
by hencq 14y ago
Maybe this is a stupid question, but why is the mining needed at all? If we can keep subdividing them, shouldn't 1 bitcoin theoretically be sufficient?
- Jtsummers 14y ago"Mining" is really accounting. Miners add new blocks to the blockchain which provides for verification of transactions and the value of individual addresses. So providing a reward to mining (initially) was a means of providing a reward for performing an essential function for the bitcoin economy. Now that more bitcoins are in the wild it's possible to collect transaction fees, the second method by which miners can profit from their activity. Eventually the transaction fees will be more than the mining reward and the theory is that miners will remain in business in order to collect those fees.
- hencq 14y agoAh interesting, that makes sense. Can miners set their own transaction fees? And related if I want to make a bitcoin transaction can I (or my software) choose which miners to use to verify those transactions? Or are those fees determined by the protocol itself?
- Jtsummers 14y agoMy understanding is that when conducting bitcoin transactions you can establish the fee you're willing to pay, the miners can optionally prioritize based on those fees. Theoretically it's possible that you'd have a transaction never verified or verified after a great period of time in the blockchain because your fee was set too low.