[sp332]

"Mining" is really solving a block. This means that your computer has verified all the transactions in the block and signed them. As a reward for keeping the transaction record secure, you get some coins. At first, the reward has to be large, to entice people to a new cryptocurrency. But over time, a secure network becomes valuable for itself, and the reward isn't necessary anymore.

[GrinningFool]

> "Mining" is really solving a block.

Well.. kind of.

Mining is really thousands if not tens or hundreds of thousands of people competing to try to solve the same block. The one machine to solve it first gets the reward. (or if in a pool, it's given to the pool.) Over and over again- in the case of dogecoin, once every minute or so. The GP's statement about it being a massive waste of resources is unfortunately true - that's a lot of electricity for any popular coin.

> But over time, a secure network becomes valuable for itself, and the reward isn't necessary anymore.

Has this actually happened in any case? Logically if there is no value to be gained from maintaining the secure network (eg, 'mining' new transactions into blocks for confirmation), then many fewer people will do so. The fact that it's a secure network is great - but it doesn't seem enough to entice a critical mass of people to maintain it at a cost to themselves.

[seabee]

Even if you ignore the problem of getting a critical mass, this is an issue!

Imagine operating the network as a public good and agreeing to minimise the resources spent on it. That still doesn't prevent one of the players from secretly increasing their computing power then suddenly taking full control of the network and disrupting other countries' economies.

The incentives means you don't have to trust anyone else - you'll keep improving your CPU power because it makes economic sense to do so.

[sp332]

There is some monetary value, in transaction fees, that are collected even if there is no block reward. There will be fewer people, but hopefully it will still be above critical mass. It really doesn't take much, even a few hundred people running low-power ASICs will do just fine. We will see something similar with Doge soon. In 2015, the payout will be fixed at 5% of what it was last month. Maybe everyone will stop mining, and maybe they won't.

[ars]

> It really doesn't take much, even a few hundred people running low-power ASICs will do just fine.

That won't work - it will enable easy fraud since anyone with a moderate amount of computing power can fake the block chain.

You need a lot of computing power - but without large rewards people won't be willing to do it.

I don't expect any crypto currency to survive unchanged past the no-more-coins date. Instead I expect the date to be extended to forever.

[maxerickson]

There's a good possibility that is still pretty optimistic.

[pkulak]

I'm aware of what mining is. And you're not just signing a block. No one would be making custom ASICs and putting server farms near hydro-electric plants if all you had to do was sign a block. You're paying people to do useless work and it's silly.

[shultays]

You lose resources to create paper currencies, I don't see how two things are different

[pkulak]

Because you lose far more with Bitcoin. Bitcoin is currently doing as many transactions as a small community credit union, but it's got server farms all over the world and thousands of individual computers and ASICs running 24/7 to "secure" it. It's totally out of control.

[nicky0]

How else would you propose securing the network?

[pkulak]

Proof of stake. Or figure out something totally new. I'm not proposing a solution, just the problem. My gut tells me there is a solution though.