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People frequently seem to ask what happens to the security of the Blockchain when the mining rewards slow down if the fees aren't high enough to pay the miners.

Here's an idea;

Large scale miners slowly wind down as profits drop, smaller scale miners using renewable sources all over the world carry on mining because it's a) cheap enough and b) critical to keeping the network running.

It was never envisaged that a number of mining companies would arise as they have or would go public, with all the dodgy incentives that brings.

This isn't what was expected but for now it's what we've got. It'll change over time. We don't need high fees to keep public companies afloat. Fee's won't matter, they'll just be a nice juicy bonus.

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Discussion

z4ch4ry 2y ago

Yeah I would agree with what you're saying.

I would also add that maybe by the time the big public mining companies are feeling less profitable in mining, we may be further along the journey towards a Bitcoin standard. So the mining companies too would be incentivised to keep the network strong (with hash rate), as their profit might be held in Bitcoin and not fiat by that juncture. (similar to what you said w/ the smaller renewable miners). Especially if some of these mining companies end up co-locating around the new renewable/nuclear grid that will (hopefully) be created in the coming decade...

Geist 2y ago

Well, it was what satoshi envisioned actually, they said a few large data centers would comprise all the "nodes" (synonymous with miners at the time). Its important to remember satoshi wasnt infallible, because I gemerally agree with your vision and if thats not the trajectory we are on then we should change course.

Matt 2y ago

I remember that, did he mention data centres? This was before the use of fpga's and ASICs, not long after pool mining was started if memory serves...I remember reasoning it all through and in the end, because the entire infrastructure depends on it companies would run nodes and mine, even at small cost, because it's one of the costs associated with remaining in business.

Geist 2y ago

The quote, though im just grabbing this off reddit

The current system where every user is a network node is not the intended configuration for large scale. That would be like every Usenet user runs their own NNTP server. The design supports letting users just be users. The more burden it is to run a node, the fewer nodes there will be. Those few nodes will be big server farms.