Bitcoin Q&A: What Happens to Transaction Fees when the Block Reward is Zero?
Channel: aantonop
Date: 2016-10-13

Keywords/phrases: Based on the incentives in the network, what happens to fees when the reward for generating new blocks goes to zero? Will miners keep mining? Will the network fees be reasonable? This will gradually happen between now and 2141. Presumable the reliance on the block reward drops while the number of transactions rises. Fees will go up not because it's getting more and more expensive but because you have more and more transactions paying the same fee or less. We know this is going to happen just as we knew the Halvening was going to happen, because bitcoin is a deterministic currency. We don't have to wait for the spokesperson from the Federal Reserve to come out and tell us what our interest rate is. We're getting better at optimisation. If we introduce all the optimisation and scaling things, we can do more than Visa - cheaper. We will manage capacity in a way that isn't fatal, failing to scale (gracefully) for 25 years.

Chapters
0:00 Do you think that when the block goes down to zero, that people will still mine at the same level? Will fees be the same as Visa transactions?
0:40 To give you some perspective, this happens gradually between now and the year 2140
2:56 I'm not worried because it's not going to be a surprise
3:49 We are getting better at optimization

This talk took place on September 13th 2016 at the Silicon Valley Bitcoin Meetup in Sunnyvale, California: https://www.meetup.com/Silicon-Valley-Bitcoin-Users/events/232546018/
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