Homework on block rewards/halving

getting my head around rewards/halving…and my Qn is related to the point when all BTCs have been mined and miners rely on fees only…

if (hypothetically) everyone who held btc at that point in time only hodled and never used it, then miners would stop mining and then what would happen to btc, re security? Surely if no txns then the system would fall?

2 Likes

My take on this:

If (hypothetically) everyone just hodled and no tx would be sent across the network, most miners would just switch to a different cryptocurrency.
Let’s say hypothetically every single BTC miner switches to some other cryptocurrency.
No miners = no transaction confirmations = the system ‘‘freezes’’. You can still access the Blockchain and look into it (look at past transactions), but no new blocks are being created. The whole system is basically frozen until a miner starts mining BTC again.
Now, if everyone knew the coin wasn’t being used, no one would want to buy it anymore, because it would be useless, so demand would go down. With lower demand comes lower price (because of the supply/demand correlation). With a lower price, BTC hodlers would start dishing out sell orders to get their profits out asap, but as we said there are no miners in the network, so no tx are being confirmed.
So if hypothetically no miner comes back to save the network, people would just have to face the fact that their money is gone and they’d have to abandon the network.
So the system would still be there, it’s just that no one would be using it.

I hope this helps a bit :wink:

2 Likes

But if (hypothetically) this is the case, Hodlers would also realize this and sell their bitcoin wich the Velocity of transactions will increase again. Because Their Bitcoin would be worth Zero value if nobody is trading it and no more blocks are being produced. Also, when the mining difficulty is getting so low, 51% attacks and reorgs is likely a bigger issue before we can get to this point

3 Likes

This question reminds me a bit of the problem with physical gold these days. It’s hard to get now. But in this case, you don’t rely on mining to secure your gold and it al depends on the market and people who find it valuable.

According to this rate, the last Satoshi’s would be mined in more than 100 years.

Check the Bitcoin statistics and economy on:

https://bitcoin.clarkmoody.com/dashboard/

3 Likes

It’s a very interesting topic to hypothesize about

Also thank you for the Bitcoin statistics and economy link :slightly_smiling_face: A lot of interesting stats on there that I previously didn’t know

1 Like

Yeah it’s an amazing website created by Clark Moody.
In this podcast, he explains the numbers and how it is calculated.

https://youtu.be/9aKiWTFL4qg

2 Likes

Thanks for the link. I’ll definitely take the time to check it out :slightly_smiling_face:

1 Like

thanks @MaxCrypto - what you said makes sense in my mind, as someone trying to learn logically. Not suggesting this will occur, but just needing to know if my thoughts are on the right track.
thank you!

1 Like

thank you - this is really interesting to look over this data! will check out the Moody podcast also.

1 Like