Once bitcoin reaches 21,000,000 and there is no more to mine, will there still be miners out there for transactions?
Transaction fees are going to become important a lot sooner than 100 years. They are probably going to be important after the next halving, at the longest range they are going to be important two halvings from now, which is about 8 years away.
Transaction fees are currently about 0.3btc per block, which is about 2.5% of the block reward. Assuming transaction fees do not grow (which is a pessimistic assumption – they will grow as they have been growing over the past 2 years) that will be 5% after one halving and 10% after 2 halvings. At that point transaction fees are a big deal.
But we have something more important to be considering. After the next halving the block reward will only be 6.25 btc per block, which means the cost of executing a large reorg is only 6.25 btc per block. If you want to send around large amounts of money with Bitcoin, you will find yourself needing to wait for a large number of confirmations to be certain that the transaction is secure.
This is because the receiver could potentially deploy a large percentage of the transaction towards mining hashrate with the intent of causing a reorg. Or better yet, they could try to bribe miners to attempt the reorg for them. If you send someone 1000btc (say you are buying a house), you can dedicate a full days worth of mining rewards to a reorg (6.25btc * 144 blocks in a day) and still come out ahead when the reorg is successful.
While it currently seems unlikely that miners would cooperate, that attack vector is a definite misalignment of incentives.
It’s even worse if the entity sending out the money is a large anonymous drug market, because they are probably sending large payments to many different people, and hiding them in a way such that we have no idea how large the sum of the payments is. A popular drug market could be sending out payments in excess of 1000btc per day where no single payment exceeds 50btc (this could be even worse if the drug market is clustering payouts to a single day every month – that day could see 30k+ btc in payouts). The drug market is already doing illegal things, bribing miners is probably not beneath them if it means that they can get all of their payments back in an exit scam.
Bitcoin is not secure for large payments unless the block reward is competitive with the payment activity of the largest entities on the network. If there’s an entity like Coinbase sending out 5k btc per day, you want the block reward to be at least 5k btc per day. This can be combated by fighting payment centralization (such that there are no major payment entities like Coinbase in the ecosystem), but today’s reality is that most payments go through one of a small number of payment processors.
Posted from Reddit /r/Bitcoin