bhavik on Nostr: Very good question and necessary for beginners to understand. -First of all you need ...
Very good question and necessary for beginners to understand.
-First of all you need to understand that mining reward is not the security budget of Bitcoin Network. It is the “Reward” for mining blocks, awarded by Bitcoin Node Runners, currently 19,000 nodes running around the world on a simple $300 computer.
-Nodes have not employed miners to secure the Bitcoin Network. Miners are joining the network out of their own greed and spending electricity because Bitcoin network is giving Bitcoin reward every 10 minutes to solve a block.
And that reward is getting halved at every 4 years and still network is growing that shows that people are interested to run the miners and profiting from it and expanding the mining infrastructure.
Current hash rate is ~600 Billion Billion hash/s, this HashRate is growing 160% annually for the last 10 years. This computing network is running on roughly 20-25 GW of energy. 60-70% of these are renewables and wasted energy.
So clearly miners are making more money, otherwise they will stop mining blocks.
Some of the inefficient miners will have to turn off their machine because of less reward, it will decrease the selling pressure and Bitcoin price will increase.
So there is not hope that Price will increase.
Value of Bitcoin will increase because of the economical & game theoretical design of the “Bitcoin”.
It will keep becoming valuable to other assets because network is able to enforce strict supply in a permission-less and censorship resistant manner.
Bitcoin will keep growing.
Let me know if you have any questions.
-First of all you need to understand that mining reward is not the security budget of Bitcoin Network. It is the “Reward” for mining blocks, awarded by Bitcoin Node Runners, currently 19,000 nodes running around the world on a simple $300 computer.
-Nodes have not employed miners to secure the Bitcoin Network. Miners are joining the network out of their own greed and spending electricity because Bitcoin network is giving Bitcoin reward every 10 minutes to solve a block.
And that reward is getting halved at every 4 years and still network is growing that shows that people are interested to run the miners and profiting from it and expanding the mining infrastructure.
Current hash rate is ~600 Billion Billion hash/s, this HashRate is growing 160% annually for the last 10 years. This computing network is running on roughly 20-25 GW of energy. 60-70% of these are renewables and wasted energy.
So clearly miners are making more money, otherwise they will stop mining blocks.
Some of the inefficient miners will have to turn off their machine because of less reward, it will decrease the selling pressure and Bitcoin price will increase.
So there is not hope that Price will increase.
Value of Bitcoin will increase because of the economical & game theoretical design of the “Bitcoin”.
It will keep becoming valuable to other assets because network is able to enforce strict supply in a permission-less and censorship resistant manner.
Bitcoin will keep growing.
Let me know if you have any questions.
quoting note1x0f…e8efBut doesn't that reduces the security budget of the network as well? By 2X.
With higher fees many avoid transactions so transaction fees is not enough for this high cost mining machines to run.
Then with 2X less issuance, miners make lesser money.
Basically the network's security is dependent on "hope" that the fiat price will have to go up.