To answer that question you have to make assumptions about the cost of mining, the cost of attacks and the cost of hash power at a point 117 years from now. But we know in the future hash power (technology) will be cheaper and thus bitcoin security will be cheaper, while bitcoin will be more valuable (or non-existing — it has to be either or).
Also remember if you have wealth in bitcoin you would likely mine at a loss merely to secure your own bitcoin.
I can’t imagine mining going away.
I think every appliance in a household will end up mining a little bit and it will be intrinsic to the fabric of the economy. The way the internet is now.
> But we know in the future hash power (technology) will be cheaper and thus bitcoin security will be cheaper,
This is not in line with my understanding if BTC. The difficulty adjusts automatically, so the real cost isn’t hashing, but energy. And there is no inherent reason why any less energy would be spent/wasted on mining/securing BTC (assuming it will be worth more than today).
The costs of mining are both capital to acquire the equipment and replace it when it is obsolete... and energy. It’s not just energy. Recently that capital cost is about %50 of OpEx, but of course it varies. We cannot predict the future cost of electricity, but we can predict that technology will get cheaper, more generic and thus more ubiquitous. This is what I meant by “cheaper”.
I expect it will be cheap the way wifi is cheap on a raspberry pi. They just include it because you may use it and it’s cheaper to include it than to make both a version with and a version without the WiFi module. (If you inly use WIFI, then the sane argument goes for the redundant-to-you ethernet port.)
You are right about difficulty factor, but that just adjusts how fast blocks are won based on past 2 weeks.
Even when price of BRC has crashed, hash power doesn’t instantly go away.
Also an attack lets you re-organize recent blocks only. Increased depth gets more expensive pretty quick.
If mining chips are cheap and ubiquitous, then an attack us very hard, because you have to beat all the existing honest chips with your attack.
If mining is cheap to attack, the rewards of such an attack will be low.
If bitcoin is valuable, it will be expensive to attack.
> To answer that question you gave to make assumptions about the cost if mining, the cost if attacks and the cost of hash power at a point 117 years from now.
I'm not convinced that you actually do have to make too many assumptions. The claim I'm making here is that bitcoin has had a steady and predictable increase in mining demand as the currency has grown, but that iff bitcoin becomes solely a low-volume high-value settlement platform (instead of a buy-coffee high-volume low-value blockchain), there will be a demand shock once the block rewards go to zero. You can reason about this while keeping the hashrates and cost of achieving that hashrate abstract.
If volume grows, this argument is moot because there will be plenty of transaction fees to gobble.
Not sure how you measure an increase in mining demand, but given that we have had three halvenings now, doesn't that imply mining isn’t going away? They are getting less bitcoin, yet still mining. I don't think it will be a shock by then. Put another way, the shock in 2012, 2016 and 2020 have all made mining very profitable in the following years resulting in mining booms in 2013, 2017 & 2021 (so far.)
Transaction volumes over time have risen as well. If bitcoin has amy value to society in 113 years, people will pay to transact it. Whether that is one expensive transaction a month or a million every block I don’t know— but I think the latter is more likely.
If you're freely giving away money (either in the form of null transactions or putting money into mining) just to secure value that you're holding, you've clearly mispriced the asset you're trying to secure!
If you put money in a savings account with interest below inflation, just to secure the value that you're holding, did you misprice the value? Or for example if you buy gold and then pay someone to watch it for you, does that mean you mispriced it?
Null transactions require mining. The question is if nobody wants to mine who will mine? Old mining chips are already so cheap they cost less than a cheap bitcoin transaction. It would not cost much to mine just to preserve the value of your holdings.
The point of submitting the transaction would be to incentivize mining by posting a bounty for it, in the form of a transaction fee. It would be just like paying other people to mine at a loss on your behalf.
Also remember if you have wealth in bitcoin you would likely mine at a loss merely to secure your own bitcoin.
I can’t imagine mining going away.
I think every appliance in a household will end up mining a little bit and it will be intrinsic to the fabric of the economy. The way the internet is now.