Many proponents state that Bitcoin will not work in the long term when block rewards drop below 1 BTC or even zero and have mining rely on just transaction fees. I never did the math calculations until now, but I can see what they mean when they say you can't rely on the fee market.
Reasoning is the following, when mining rewards reach ZERO:
- Bitcoin current max transactions per second is: 7 tps
- 7 * 600 seconds (10 min) = 4200 transactions per block
- If each transaction was worth:
.05 USD = .05 * 4200 transactions per block = $210 block reward
.50 USD = .5 * 4200 transactions per block = $2100 block reward
This is assuming block rewards are ZERO.
Now if leaving a mining machine on and it cost a significant amount of electricity. Many miners won't turn it on anymore, which leads to a much lower difficulty hash rate. From there any big player can come in with massive mining power and cause a 51% attack or even just stall the network by not accepting any transactions.
What are some of the proposed solutions to this supposedly problem in the long term?