​​Mom, what happens to my mining rewards when Bitcoin block rewards go to ≈0 🤔

If you don't want to read my rant, just click the click and read the awesome paper.

Well, son, the 21M Bitcoin might have been a meme. Do you recall all the tweets about:

- Never ever will more than 21M Bitcoin exist
- No inflation, fixed supply, no money printing by evil banks

It's all fancy-schmancy before you actually think about how it works...

As a miner, you are not running a node as a charity. You spend energy if you stake you have a different equation here, but we don't really need this difference here now. Anyway, you need to have an income to cover your expenditure for doing work. It's either you tax users by charging transaction fees or get paid by the protocol for doing work for it. The former takes a part of what a user owns and the latter is what is called block rewards: inflation but at a verifiable and pre-agreed way, so people are okay with it.

As a comparison, USD inflation is not okay because it's unproven, random, and is not reached by the consensus of the network and its participants.

Issue with Bitcoin 🤕 That block subsidy, which currently makes up 99% of the total block reward, is being phased out according to Bitcoin’s fixed emission schedule. In 2020, Bitcoin’s annual issuance will fall to 1.8%. By 2028 it has halved twice more to 0.5%. As a result, the most important source of miner revenue, the block subsidy, will have to be replaced by an entirely new source of revenue.

Basically, where will miners be getting rewards for their work? The incentive model is why this entire thing functions!

What is the solution to this not-such-a-hypothetical problem?

1] increase max supply, but then one of the USPs of Bitcoin gets eliminated
2] improve blockspace
3] DAO-style to subsidize security via off-chain mechanism for donations
4] adapting the supply of blockspace
5] decreasing miner-extractable value
6] improving miner punishment

Narratives are a strong tool to make people do what you want - but they can also bite you back.

There is a reason why the financial system is the way it is now. It's not perfect, but it's not that way just because of evil old grandpas. Printing more money to grow the economy NOW and have your life become better is a choice people make because, mainly, due to their lifespan. Many don't care what happens with the economics in 200 years, but care what happens now. It's always an investment, with everything you do in life, because every valuable resource is scarce. that's why, in the first place. A cool topic over beers 🍻

Which side of the "solution" for this problem do you see as the best fit?