Subject: Re: [bitcoin-dev] Block solving slowdown question/poll

From: ZmnSCPxj <[email-masked]>
Date: Tue, 24 Mar 2020 07:42:46 +0000

Good morning Andrew,

> > Hi, noob question here: Is there a long-term plan for if the block reward drops
> > too low to ensure the security of the network?
> >
> > IIUC miners only make profit from block rewards and transaction fees, and once
> > the block reward drop to zero we're merely hoping that transaction fees will
> > keep mining expensive enough to stop a state actor or someone from buying
> > enough hash power to attack the network. If that's the case, should we start
> > making plans now to change the protocol to allow an adjustable block reward?
> >
> > Here's a half-baked idea I had of how that could work: Since the block reward
> > dilutes the value of the currency bitcoin holders have an incentive to keep the
> > reward low. However, since the block reward is also (partly) what incentivizes
> > mining, bitcoin holders also have an incentive to keep the reward high enough
> > to keep the network secure. So if bitcoin holders were able to vote to decide
> > the block reward they "should", hypothetically, reliably choose a value that
> > balances these two concerns.

They already do so, via an implicit "field", known as the transaction fee.
This is "implicit" since it is only the difference of the sum of all inputs with the sum of all outputs, but any Bitcoin HODLer spending their coins always need to make this decision.

This makes the vote for how much security is needed to be costly to the voter, which is appropriate: you pay for your security.

This mechanism is the same mechanism as well that is the long-term plan for the lowered block rewards in the future, and is already the best known idea to tackle this problem as well.

Regards,
ZmnSCPxj