Quote from: Bizmark13 on March 17, 2015, 02:50:08 AM

Quote from: rexxarofmoknathal on March 17, 2015, 02:17:27 AM

Ahh okay. So how will transactions work then, if there isn't any mining? Will it all take longer because there will be no more confirmations or will it work in a different manner?

There will be mining for as long as Bitcoin exists. New blocks will still be added to the blockchain every 10 minutes on average. The difference is that instead of mining for newly generated bitcoins, miners would be mining for transaction fees instead. Just like today, miners with more hashing power will solve more blocks and miners with less hashing power will solve less blocks. Today, the block reward consists of 25 newly generated bitcoins and the miner gets a few extra (e.g. 0.5 BTC) from transaction fees. In about a year or two from now, it will be 12.5 BTC plus transaction fees. Then a few more years later, it will be 6.25 BTC plus transaction fees and so on.

We don't know what the Bitcoin economy will look like two or three decades from now when the generation of new coins becomes insignificant due to continued block reward halvings or whether or not the model of mining for transaction fees is even viable at all although a few altcoins have tried to replicate the experiment. Premine (PMC) is/was one of them:

Quote from: creditcoin_CRD on January 22, 2014, 06:12:59 PM

Premine, also known as PMC, is an alternate cryptocurrency that is defying normal convention in its method of mining and distribution. While some coins are mined, or earn you interest, Premine is exclusively redistributed by its users, and block rewards are generated only by network transaction fees...

...Premine is setting out to prove that cryptographic currency can continue long after the minting process has ended, making it not only a fascinating glimpse into the future of Bitcoin, but also a viable and stable alternative that thanks to its low total supply of less than 500,000 coins, allows each coin to store a great amount of wealth. This makes PMC an excellent alternative store of money. To say Premine is the future of Bitcoin isnt far from the truth.

Will Bitcoin be able to survive once the minting of new coins has ended? Nobody knows. PMC started with a market cap of zero. Bitcoin currently has a market cap in excess of $8 Billion USD. Already suffering from volatile pricing, we may discover that Bitcoin might not survive this transition, and that no coin with such a high market cap ever could. In this sense Premine is also future-proof, having avoided this hazardous transition phase altogether.

Unfortunately, it failed:

Quote from: maardein on August 18, 2014, 07:59:16 AM

Quote from: Bizmark13 on August 17, 2014, 01:23:29 AM

So... How profitable was (is?) mining PMC for transaction fees anyway?

I've been semi-following this coin for a while and I know PMC was designed as an experiment to see what the future Bitcoin economy might look like once all coins have been fully mined and whether or not a community of miners can be supported solely through transaction fees alone so I'm interested to see how the experiment turned out now that it's coming to a close.

Well, I can tell you the result of that experiment. It turns out people are greedy bastards, and do not pay transaction fees unless they are forced to by the client. Even when PMC was quite popular, and worth quite a lot, it was impossible to get any profit from mining. Transactions with thousands of PMC didn't even have 0.1 PMC in fee.

I have been mining PMC from the start, and have been losing money on it from the start as well.

So if the rewards for a miner is only the transaction fees (which we assume will be decreased further) then the price of bitcoin would have to be really high relative to today's in order for mining to be profitable? What sorts of price levels would we be talking about?