Elvis Nuno on Nostr: I fully agree with the supposition, but it can’t be overstated what a significant ...
I fully agree with the supposition, but it can’t be overstated what a significant paradigm shift that is when compared to what hetetofor has been considered the the primary focus of a massive global network of miners: to mint new coins. Notably at a relatively predictable rate, and volume.
Go to any “mining calculator” and the calculation is made based upon a relatively predictable set of values:
- the current difficulty
- the networks total hash rate
- your hashrate relative to the rest of the network
- the number of coins you are guaranteed to receive upon mining said block.
While these calculators vastly over-simplify the profitability of mining, they still provide *something* predictable,
Like clockwork, approximately every 10min, 3.125BTC is minted.
But at the point when all coins have been minted, mining revenue will cease to have that mathematically predictable reward from each new block.
Instead the mining rewards become the value of that block space and, more specifically, the value of the work being processed in each batch of transactions. Which is notably a far more complex series of variables than the simple transacting of a currency changing hands.
Moreover the value of that block space is (and will continue to) become a growing list of complex variables that will become increasingly more difficult to predict as a myriad of applications that exist atop the bitcoin blockchain continue to grow:
- Layer2 activity (something that is notably in it’s earliest phase of development — the STX network, blockstreams “liquid” assets, etc.)
- On-chain reconciliation of activity across the rapidly growing lightning network.
- Any other novel applications yet to be developed.
And finally, last but not least:
- Simple on-chain transactions of bitcoin (as a base currency) being sent one wallet to another.
With all of these activities combined it is obvious that mining will certainly continue to be profitable. But nonetheless this is a complex combination of variables that will each fluctuate both independently of one another and effectively in competition with one another for inclusion in each new block.
Go to any “mining calculator” and the calculation is made based upon a relatively predictable set of values:
- the current difficulty
- the networks total hash rate
- your hashrate relative to the rest of the network
- the number of coins you are guaranteed to receive upon mining said block.
While these calculators vastly over-simplify the profitability of mining, they still provide *something* predictable,
Like clockwork, approximately every 10min, 3.125BTC is minted.
But at the point when all coins have been minted, mining revenue will cease to have that mathematically predictable reward from each new block.
Instead the mining rewards become the value of that block space and, more specifically, the value of the work being processed in each batch of transactions. Which is notably a far more complex series of variables than the simple transacting of a currency changing hands.
Moreover the value of that block space is (and will continue to) become a growing list of complex variables that will become increasingly more difficult to predict as a myriad of applications that exist atop the bitcoin blockchain continue to grow:
- Layer2 activity (something that is notably in it’s earliest phase of development — the STX network, blockstreams “liquid” assets, etc.)
- On-chain reconciliation of activity across the rapidly growing lightning network.
- Any other novel applications yet to be developed.
And finally, last but not least:
- Simple on-chain transactions of bitcoin (as a base currency) being sent one wallet to another.
With all of these activities combined it is obvious that mining will certainly continue to be profitable. But nonetheless this is a complex combination of variables that will each fluctuate both independently of one another and effectively in competition with one another for inclusion in each new block.