There are some media reports that state that if the BTCUSD exchange ratio drops far enough, say below $5k per BTC, that mining will no longer be profitable. But, I do not see how this makes sense given that once bitcoin reaches 21 million coins the incentive for miners is limited to the transaction fee.
Wouldn't the transaction fees for mining simply go up to cover the cost of mining?
Wouldn't the transaction fees for mining simply go up to cover the cost of mining?
No, it wouldn't. Transaction fees are not related to the exchange rate. They are only related to the supply and demand of available block space. If not many people are transacting and blocks are not full, then there is an excess supply of block space and not a lot of demand for it. This will drive fees down, regardless of the exchange rate.
If the exchange rate were low enough that the block reward is not sufficient (regardless of the block subsidy existing), miners would simply stop mining. This will eventually reduce the cost of mining such that those who are still mining will become profitable again.
If the exchange rate were low enough that the block reward is not sufficient (regardless of the block subsidy existing), miners would simply stop mining. This will drop down the security of blockchain and break the whole crypto pyramide.
