Re: what will happen after 21 million bitcoins are mined? (in layman's terms)
This opens up a new perspective in the discussion, which I had not thought of before now.
At the current block reward of 6.25BTC, miners averagely earn $122k - $125. Using the current average rate of one Bitcoin. If you include the tx fee, that's an extra ~$3k.
For the reward of mining to remain commensurate with the current value (in USD), i.e, 0.15BTC giving miners about the same amount they are earning now, which is ~$125k, then the value of 1 Bitcoin needs to rise to above $800k. That's a huge leap from the current price levels.
Would we likely be seeing $1 million to 1BTC within the next 25-30 years?s.
At the current block reward of 6.25BTC, miners averagely earn $122k - $125. Using the current average rate of one Bitcoin. If you include the tx fee, that's an extra ~$3k.
For the reward of mining to remain commensurate with the current value (in USD), i.e, 0.15BTC giving miners about the same amount they are earning now, which is ~$125k, then the value of 1 Bitcoin needs to rise to above $800k. That's a huge leap from the current price levels.
Would we likely be seeing $1 million to 1BTC within the next 25-30 years?s.
Before thinking of the price that would be required, think of the first part mentioned, transactions cost would have to be ~$125k, if we take the last full block, 754925 has 1,492 transactions, so that would be around 83$ per tx, who do you think is going to pay that amount? People who move millions, yea, but nobody is going to pay even a $500 yearly subscription at these levels.
It's the opposite way, it's not like fees will have! to compensate for the reward, it will be how much people will want to pay in fees and from this, we will find out how much of the block reward will be replaced by those fees. For a brief period in 2021 the average fee went to 60 with the network clogged completely, this won't last for more than a month simply nobody is going to pay those forevers, there won't be any constant pressure to pay that much, they will simply abandon transacting alltoghehter.
Now I can pay a fee of 50 sats/vbyte to open a channel, and then buy 100 coffees through that channel before I need to close it. In this scenario I have saved money on fees by paying 0.5 sats/vbyte per each of my 100 transactions, but at the same time I have paid 10x what I would usually pay for the block space.
But you will still need to pay on average 1$ for each coffee purchase to conitribute enough to the network.
So you either lock in 1000 coffee purchases or we, hmm, how do I say this, we increase the number of possible transactions in a block, by increasing something... something.. not width, not length, but , maybe size?
