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I read that it was possible to mine empty blocks, so that miners can still earn when there are no transactions in the network.

What would happen if the top mining pools started mining empty blocks alone, stopping all transactions from being processed?

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There would be a lot of empty blocks and the number of unconfirmed transactions would increase dramatically. But at the same time, miners who are including transactions in their blocks will start being paid more and more. Those miners including transactions in their blocks will be able to collect all of the transaction fees that are being paid. Because the number of transactions that can be confirmed in a given amount of time has significantly decreased, people will begin paying more and more in transaction fees in the hopes that their transaction gets selected. So the miners who are still including transactions are going to get paid even more than they were before.

This scenario is unlikely to happen, or if it did, it would not last long. Bitcoin's incentives structure makes it so that miners will want to include transactions in their blocks. Otherwise they will be missing out on money that they could be earning. We expect miners to be greedy (after all, most people want to have more money) and them being greedy is exactly what maintains the network.

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  • I'm glad you mentioned, what would happen and not just the fact that it would be unlikely. The part about fees getting higher, makes me think that miners could even intentionally fill up a block with their own transactions, in turn driving the average fee up.
    – Kyle Graham
    Mar 22, 2018 at 22:48
  • @KyleGraham yes, that is possible, however for each tx the miner puts in the block, they incur an opportunity cost of collecting fees for a normal tx. If the miner broadcasts their fee-raising txs, then there is also the chance another miner will include them in a block first, and thus our 'attacking miner' would lose their fees outright. If they do not broadcast them, then the attack will be less effective at raising the fee rate. If you search you'll find more info and discussion on the game theory behind an attack like that.
    – chytrik
    Mar 23, 2018 at 0:32
  • @chytrik I understand now, It would not be an advantageous endeavour for the miner to do it. I will 100% look up more information on this, regarding the game theory. Thanks for the answer
    – Kyle Graham
    Mar 23, 2018 at 2:01
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    @KyleGraham some variation of that attack may actually be profitable, I just meant to highlight the fact that there are additional considerations. Either way, worth doing more research on!
    – chytrik
    Mar 23, 2018 at 2:49

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