Quote from: rhubear on February 24, 2012, 06:02:37 PM

Quote from: michaelmclees on February 24, 2012, 05:39:31 PM

If maintaining a minimum of 50BTC per block is the goal, then we're going to need to see much higher volume of transaction. I'm not sure this is the goal. Perhaps in 20 years, when BTC is widely used and blocks are worth 1BTC, transaction fees will only total 10BTC. I think this is also an acceptable result.

Block mining payouts of 11 BTC will only be acceptable if 1) its profitable using the hardware required and 2) Its cheaper to mine BTC than to buy it.

Both of these depend on the fiat currency value of BTC at that time (or the barter value!); a completely unknown quantity.

If the 50BTC per block payout is not maintained next year, I personally suspect mining except for the hardcore miners will collapse. Miners will have to be able to produce multiple GHashes to be profitable (prob already so). In the meantime I'll be buying my BTC I think, and possibly doing a little FPGA mining only if its cheaper than buying from the exchanges.

Depends on what you mean by collapse?

To a miner nominal price is totally irrelevant.
To a miner nominal difficulty is totally irrelevant.

All that matters is (price * reward) /difficulty. So if the reward subsidy is cut in half and difficulty falls by 50% or price rises 100% (or some combination of the above) then you are making them same.

No collapse. Some miners (the highest cost and least efficient ones) will be forced to quit and when they do difficulty will fall. The system will balance itself.

Since the concept of (price * reward) / difficulty is somewhat abstract you can look at it in terms of revenue per GH/s. Bitcoinx makes some nice charts (they are 100MH/s not 1 GH/s).

Today a miner makes about $3.60 per GH/s in gross revenue. If neither price nor difficulty changed then that would be $1.80 per GH/s after the subsidy cut. However as you can see from the chart difficulty & price do change continually. If we had the same difficulty and price as in early January after the subsidy cut then a miner would make $3.00 per GH/s only 16% less than now.

There is no IF. Miners won't be making 50 BTC next year. Period. Transaction fees may rise but not that much. Fees average 0.2 BTC per block. Maybe they rise to 1 BTC per block but they aren't going to rise 10,000% in 9 months.