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If I understand BTC correctly then the return on mining is going down. Once the cost of mining exceeds the return in coins then there are only a few reasons to

If I understand BTC correctly then the return on mining is going down. Once the cost of mining exceeds the return in coins then there are only a few reasons to continue mining: 1) Altruism. Some people will just want to support the network. 2) Botnets. If you aren't paying for the hardware then you don't care about the cost. 3) Control. You are a large entity that wants to take over the network. 4) Ignorance. I assume some people will continue to mine and just not know they are losing money doing it. Please let me know if I am missing something. I am betting on a turning point where it becomes more reasonable for the government to take over the network, at least temporarily. It is not a stretch to think that someone (not necessarily the US govt) with enough computer power could get a benefit from controlling the entire network.

dllthomas 13y ago
If it is not profitable to mine, then people will have to pay transaction fees to get their orders processed in a timely manner. These will have to be enough to keep enough people mining. It will only be cheap to run a 51% attack if there's not many people using the network to process transactions. Which isn't to say it necessarily won't be cheap enough for some specific goal. Simple ability to double spend isn't likely to be worth enough to a state, though, I think.
dragonwriter 13y ago
> If I understand BTC correctly then the return on mining is going down. The cost in terms of hashing effort expended to produce new bitcoins goes down over time, and eventually no bitcoins can be mined, however, there are two reward systems for mining: first (and by design important in the early stages of bitcoin adoption) is production of new bitcoins, second (and by design important in the late stage of bitcoin adoption) is transaction fees. Remember that miners are the ones verifying transactions in the bitcoin network, that they can prioritize which transactions to verify, and that all transactions can include an offer of a transaction fee as a reward for verifying them.

dllthomas 13y ago

If it is not profitable to mine, then people will have to pay transaction fees to get their orders processed in a timely manner. These will have to be enough to keep enough people mining. It will only be cheap to run a 51% attack if there's not many people using the network to process transactions. Which isn't to say it necessarily won't be cheap enough for some specific goal. Simple ability to double spend isn't likely to be worth enough to a state, though, I think.

dragonwriter 13y ago

> If I understand BTC correctly then the return on mining is going down. The cost in terms of hashing effort expended to produce new bitcoins goes down over time, and eventually no bitcoins can be mined, however, there are two reward systems for mining: first (and by design important in the early stages of bitcoin adoption) is production of new bitcoins, second (and by design important in the late stage of bitcoin adoption) is transaction fees. Remember that miners are the ones verifying transactions in the bitcoin network, that they can prioritize which transactions to verify, and that all transactions can include an offer of a transaction fee as a reward for verifying them.