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Comment by philliphaydon | Hacker News Reader

If a miner does not make money then they wont mine, if there's no miners cos no one can make money... who verifies transactions then? Or am I just really stupid and don't understand this stuff...

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As long as the currency maintains some value, there's an equilibrium at which it will be profitable for some to mine.

To paraphrase Yogi Barra, "nobody mines anymore, the market is too crowded"

A variable number of miners are competing for a fixed reward. So everytime a miner calls it quits, all other miners become a tiny bit more profitable.

Isn't the BTC / hash fixed until the difficulty changes? Like, for a given difficulty you should expect N hashes calculated until a block is mined, so if you kill off half the miners (in terms of hash rate) the time until block mined just becomes twice as long (so now there are half as many miners chasing half as much reward).

BTC Miners make most of their money from transaction fees not block rewards. Fewer blocks = reduced supply = increased costs to get into blocks = higher reward for the same hash power.

Ahhhh, this is good to know!

I see, thanks.

That's true in the general case, but it only happens after a difficulty drop. Until then, miners dropping out will raise the block time (again, just a tiny bit). For cryptocoins with more dynamic difficulty adjustment, this process happens a lot more quickly.

This worries me about BTC, because it may get to the point where for the drop in difficulty takes too long that it will no longer be profitable, in this case crypto currencies where the reward is higher and the increase in reward vs difficult increases makes it more profitable means more miners will ditch BTC and go to those... That means transaction verification times just keep raising and then BTC eventually becomes useless.

That's my understanding anyway...

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