

Ask HN: What would happen if Bitcoin value went lower than the cost to mine - hoffsam

If mining bitcoins became unprofitable and people stopped doing it en mass, then who would verify transactions?  Would the system cease functioning correctly?
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Fzzr
My understanding is that Bitcoin production difficulty is inversely
proportional to the amount of power being spent on mining. If the price of BTC
drops so much that it's not worth it to mine and some people stop, the
difficulty will drop and it will thus be more worth it for the remaining
miners.

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wmf
Rational miners would indeed stop mining, but fanboys would continue mining at
low difficulty. (Keep in mind that some people are using "free" electricity,
so their marginal cost is basically zero.) Then someone might do a 51% attack
just for the lulz.

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suki
The difficulty of mining slides up and down depending on the block rate.

As the profitability drops, some miners will stop, the block rate will drop
and the difficulty will drop until things balance again.

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hoffsam
But I wonder if there is some kind of minimum amount of mining required to
verify X number of transactions. If there are many transactions, but few
miners, then would transactions begin taking too long to become verified?

~~~
bdr
Yes, there is a byte limit to the size of a block. If blocks become infrequent
enough due to decreased mining power, it's conceivable that a backlog of
transactions would build up. At the next difficulty adjustment, though, speed
would pick back up again.

