What incentivize miners to keep mining if they start not earning profit from mining?

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What incentivize miners to keep mining if they start not earning profit from mining?
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To my understanding, the incentives for miners are the block rewards and the transaction fees. However, with the halving period approaching and with the recent price drop of bitcoin, this would greatly reduce the profit for the miners. They may even lose money for mining. When this happens, what keeps them mining?  Wouldn't miners leave the network (stop mining) and lead to weaker network?

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Hi Chris!

So, technically those are the two reasons that incentivizes miners to continue mining, i.e. mining rewards and tx fees. However, with the halving, it indicates scarcity of the crypto and therefore, appreciates its value. As observed in the last halving event, the price has been seen to be boosted, which in turn acts as an incentive for miners to continue mining, as the boosted scarce bitcoin would still overcome their cost of mining. However, once the reward stops entirely, that is at the 21M cap, it can be speculated that miners would leave if the cost of mining is higher than what they make with the tx fees.

From an opportunist perspective, hardware and mining chips are constantly being upgraded. It is hard to speculate what mining is going be like by 2140, however, by this time, the supply will reach a halt, although it might be so that mining costs are so low that miners find it profitable to continue mining because tx fees alone makes it sufficiently profitable.

@Saarah

Thanks Saarah! For the last two halving period, yes the price did appreciate and that covered the decreased reward. However, I believe stating that decreased supply leads to higher prices is assuming alot of things and the market never goes as people predict. What do you think would happen if the price doesn’t appreciate after the halving? Would the miners still think mining is profitable? If not, Will they leave the network and potentially cause the network to fail? Or, perhaps when miners leave the network, the competition is lowered and it becomes easier to win the rewards so maybe that would make up for the decreased reward? What do you think Saarah?

@iskysun96@gmail.com

Well, isn’t that how the market works? Reactions are followed by corrections that stabilizes the market eventually. I think miners who leave early would be similar to panic sellers in the market. Better to wait out the dip, as it usually bounces back.

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