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Can I be the transaction processor and take in transaction fees as income without mining a Bitcoin? Would the fees be so low that it is not practical?

Or is it true that I have to be a miner in order to process any transaction? However, after year 2140, when all Bitcoins have been mined, then will people only use the computer to process transactions without doing any mining?

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No. When miners mine blocks, that is "processing transactions".

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  • so again, when mining stops in year 2140, then what about another 2 billion or 3 trillions transaction come in, then how can we have new blocks? – deeper-understanding Jan 27 at 14:56
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    And who says that mining stops? Mining REWARDS stop, but the miners are still getting the transaction fees. The concept is that slowly the Tx fees will be the miner rewards, not the per block payout. – TomTom Jan 27 at 22:59
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I think this another case where a literal interpretation of Bitcoin terminology can be misleading

Mining

The primary purpose of the process referred to as mining is not the creation (digging up?) of new Bitcoin money. The primary purpose of mining is the production of new blocks in the blockchain - the public transaction journal that is replicated throughout the Bitcoin network by all full participants, including many ordinary wallets.

The miners are currently granted, by the other nodes in the network which accept the mined blocks, a fixed amount mining-reward where the reward amount halves every few years according to a fixed halving rate that is part of the consensus rules. But this is not what causes mining to be hard work - adding to the new block a record of a mining reward of freshly created bitcoin takes almost no computational work, compared to the main task of securing the blockchain which makes that block valid.

Mining is maybe more like building an ever-lengthening structure by reusing old bricks from older sections and being allowed by the public to create two new bricks for each section completed.

The word mining is misleading if it causes you to think that the primary purpose is discovering new money. It isn't like mining gold where the primary purpose of miners is to find gold.

Processing

Lots of people process transactions, in order to create new draft unconfirmed transactions, to validate unconfirmed transactions being passed around, to calculate balances, etc. Only miners add new transactions to the public replicated transaction journal we call the blockchain.

Confirming

Miners effectively "confirm" transactions and we talk about numbers of blocks added over a block containing a transaction as "confirmations" of that transaction.

Confirming transactions is a special type of processing. It is part of mining.

Transaction fees go to whoever first confirms a transaction.

Validating

Every member of the Bitcoin network, including wallets, performs at least some validation of the new blocks and new transactions it receives. This is a significant part of the routine processing of transactions and blocks. This is the way that fake blocks and attempted fraud is detected and rejected. This is an example of an important type of processing of transactions that is not directly rewarded by transaction fees.


Confirming transactions is processing that only miners can do

Everyone is a transaction processor. Only miners are transaction-confirmers and block-makers. Only block-makers get a special reward of new money for each new block and only transaction-confirmers collect transaction fees from the first confirmation of each transaction. These two jobs are indivisible because confirmations are intrinsically part of new blocks.

For people new to Bitcoin, the word "miner" doesn't immediately bring to mind transaction-confirmation or block-making. It brings to mind digging down through soil and rock to find precious matter buried there. This isn't helpful. People realise its only an analogy but they don't know how far that analogy is valid.

So we shouldn't take terms like mining too literally. They often have subtly or significantly different meanings in the Bitcoin world than they do in everyday usage.

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  • I have to slowly digest everything you wrote. But if mining if finding new blocks, and mining will stop in year 2140, then what about all the new transactions not having new blocks to put the data in? – deeper-understanding Jan 27 at 14:55
  • Mining will not stop in 2140. Only the subsidy will stop; mining will continue, and mining income will be purely fees. – Pieter Wuille Jan 27 at 18:28

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