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As the mining Bitcoin payout decreases from 50 to zero, what incentive is there for miners to continue operating?
Is there a need for miners to continue to operate when the payout decreases to zero?
I thought part of the purpose of mining is to validate the Public key with the General Ledger that is replicated in P2P fashion between nodes. If the miners go away, will GL validation stop?
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All that is needed is a number of miners sufficient so that a consensus of bad actors gains control to disrupt the blockchain doesn't happen.
Transaction fees are a tiny fraction of the level of the block reward subsidy ( still not exceeding 1% ) but as bitcoin is more widely used, the fees will eventually make up for the lowered subsidy. That's what is expected, and so far that appears to be what is actually happening:
So is it true to say, if not for transaction fees, then there ultimately would be no motivation for miners? – goodguys_activate – 2012-09-15T06:24:43.517
Until the block reward subsidy is completely gone a hundred years from now, there will always be that as an incentive. Right now fees don't even reach 1% of the level that subsidies are. In December that will maybe end up closer to 2%. At some later point it becomes larger than the block reward subsidy.
Worst case scenario, those holding bitcoins have an interest in protecting the network and pay extra (this already happens with pools with payout of greater than 100% of shares). – Stephen Gornick – 2012-09-15T09:16:10.917
@makerofthings7: No. Anyone who held Bitcoins has an incentive to help them maintain value. If it took mining to do that, then they'd have an incentive to mine. – David Schwartz – 2012-09-15T23:48:15.917
Also to note, is a tragedy of the commons arises when the block reward goes to zero, whereby miners have an incentive to include ANY transactions with a non-zero fee thus driving fees to 1 satoshi. There will likely be solution provided before this could happen. See here https://en.bitcoin.it/wiki/Tragedy_of_the_Commons
– Streblo – 2012-10-16T22:31:47.783