At the point where all the bitcoins are mined, what is the incentive for 'miners' to keep processing transactions?
1) Parties who wish to transact must provide that incentive via paying transaction fees
2) The fees will be in proportion to the hash rate which is a function of the computing power/energy allocated to hashing which is related to the number of 'miners'
3) So the transaction fees will be in proportion to the cost of energy.
4) BUT ALSO anyone who owns bitcoin is incentivized to engage in 'mining' because as the number of 'miners' approaches zero, the blockchain becomes susceptible to attack (transactions are 'forged' and bitcoins are 'stolen') by a sufficiently powerful malicious party (51% attack)
5) So bitcoin's value will be a function of the interplay between the desire to transact with bitcoin and the desire to retain ownership of bitcoins
1) Parties who wish to transact must provide that incentive via paying transaction fees
2) The fees will be in proportion to the hash rate which is a function of the computing power/energy allocated to hashing which is related to the number of 'miners'
3) So the transaction fees will be in proportion to the cost of energy.
4) BUT ALSO anyone who owns bitcoin is incentivized to engage in 'mining' because as the number of 'miners' approaches zero, the blockchain becomes susceptible to attack (transactions are 'forged' and bitcoins are 'stolen') by a sufficiently powerful malicious party (51% attack)
5) So bitcoin's value will be a function of the interplay between the desire to transact with bitcoin and the desire to retain ownership of bitcoins
Thoughts?