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So long as mining remains profitable, as it has to be in order for anyone to spend resources on mining, the energy race will continue. As mining profits decrease over time, so too will the pool of miners who are able to mine profitably.

The network will, as a result, centralize over time to a select few that have access to cheap and plentiful energy. These "big energy" :) companies will control most of the hashing power.

You can already trace this with bitcoin by looking at who the early miners were versus who the miners are now.

>>If Bitcoin becomes very popular and valuable

For this to happen, you need this to be a fiat currency.

Other wise the rest of the world has no obligation to trade in a currency where there already exist people who own bulk of the wealth and others enter poor by default. The non-bitcoin crowd can go to a new currency, which doesn't have mining kind of a setting.

At that point in time bitcoin will lose its value rapidly and all the money spent mining and acquiring bitcoins would have gone for nothing.

There is reason why currencies have to be backed by governments with massive militaries. If they didn't the poor can simply walk out the current scheme, leaving the existing ecosystem in tatters.

Fiat currency is a necessary evil. People who come later, care nothing for people with prior advantage. Bitcoin's goals are too ideal to work in the real world.

I think that's one of the biggest flaws of bitcoin and will eventually lead to its collapse.

I simply don't want to invest in mining considering how much people have already mined. There's deflationary pressure for many reasons, but definitely because of the rewards being cut in half every couple of years. And currency deflation is highly unappealing for those who don't have large amounts of that currency.

Psychologically this is bad design, and it turns a lot people off from it. It makes it feel like a scam. That's good enough to piss enough people off about it to never use it, including me.

> It makes it feel like a scam.

Under what definition?

Is this definition a standard that couldn't be applied to other currency systems or asset classes that you respect?

There's a reason I ask so specifically

> And currency deflation is highly unappealing for those who don't have large amounts of that currency.

For an individual investor making a decision about which currency to hold, all else being equal, deflation is always better than inflation. Not sure what you're trying to say exactly.

You're describing a cognitive bias wherein you would be turned off from a monetarily beneficial decision because of the foregone gains you would've had had you made the decision to enter the game earlier. This won't lead to the collapse of bitcoin, it just means that those who will profit from mining now and in the future are those who won't fall prey to that sort of thinking.

>Bitcoin's mining reward halves every couple of years. When the Bitcoin block reward becomes negligible, as it certainly will in within a few decades, the only thing funding Bitcoin miners will be transaction fees, so the entire cost of Bitcoin mining will be borne directly by users of the network.

I don't think this logic is sound. The cost of bitcoin mining is already borne by users of the network (aka miners)? What does the diminishing block reward have to do with anything? The end result is that if you do calculations, and perform proof-of-work, you receive bitcoin. It shouldn't matter to the miners if it comes from block reward or transaction fees.

"Users" is a much bigger set of people than miners (a supermajority of which would fit on a couple of couches on a stage).

> It shouldn't matter to the miners if it comes from block reward or transaction fees.

The point is that transaction fees will never be as high as current block rewards. The cost of bitcoin mining is currently subsidized by inflation of the Bitcoin money supply. That inflation will end, and it will not be fully replaced by transaction fees.

> Bitcoin's mining reward halves every couple of years. When the Bitcoin block reward becomes negligible, as it certainly will in within a few decades, the only thing funding Bitcoin miners will be transaction fees, so the entire cost of Bitcoin mining will be borne directly by users of the network.

Just let everyone mine as much as they want. Don't limit the rate or the amount. All of a sudden, miners will have to self-regulate their output lest the currency become hyperinflated.

You might not like that outcome, but if you say that is going to be the endgame anyway after a few decades, why not let it happen now?

If you're asking why Bitcoin mining had to be heavily subsidized at the start, the reason is that Bitcoin had little value and little usage, so transaction fees were generally zero and a large mining incentive was necessary. Obviously that isn't true anymore, but the exact time inflation should end could not be foreseen in advance, and the inflation schedule was fixed at the start.

If you're asking why the inflation schedule had to be fixed in advance, that's because otherwise there is no trustless way to ensure it stays in check. The genius of Bitcoin is the way it uses incentives to enforce rules in a distributed system made up of selfish and even malicious participants. As you say, miners would have to self-regulate against their own self interest, and that would not be stable.

But the point is the rate is limited (1 block per 10 minutes) and the amount is also limited (by the value assigned to the transaction by the users). There will be no runaway mining, and the miners do not need to 'self-regulate'.

Wow, what a terrible idea. Do you not know how inflation works? If a bank prints money for itself, do you think it worries how inflation is affecting its holdings? No, they have more holdings because they're the infiltrators. They have more monetary even as they devalue the currency. This is why Bitcoin is necessary. This is where bitcoin shines. Deflationary currencies are the future. Don't be that idiot that pretends temporary deflation events are the same as a currency that is intentionally deflationary.

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