What Happens When ALL 21 Million Bitcoin Are Mined? | Michael Saylor

00:07:58
https://www.youtube.com/watch?v=dSSemefMEfg

Résumé

TLDRThe video explains the security of Bitcoin through its decentralized network of miners, who secure the blockchain by generating a massive hash rate. Miners are incentivized by block rewards and transaction fees, with the latter expected to increase as block rewards decrease over time. The speaker compares Bitcoin transaction fees to real estate commissions, emphasizing the limited transaction space and growing demand. The discussion highlights the economics of mining, the impact of electricity costs, and the resilience of the mining industry during market downturns. Overall, it presents Bitcoin mining as a sustainable and essential component of the network's security.

A retenir

  • 🔒 Bitcoin's security relies on a decentralized network of miners.
  • 💰 Miners are incentivized by block rewards and transaction fees.
  • ⏳ Block rewards will diminish significantly by 2035.
  • 📈 Transaction fees are expected to grow due to limited block space.
  • 🏢 Transaction fees in Bitcoin can be compared to real estate commissions.
  • ⚡ Electricity costs play a crucial role in mining profitability.
  • 📉 Mining continues even during market downturns due to sunk costs.
  • 🔄 Mining equipment prices decrease significantly over time.
  • 🌍 Miners adapt by migrating to areas with cheaper electricity.
  • 🔧 The long-term outlook for Bitcoin security remains strong.

Chronologie

  • 00:00:00 - 00:07:58

    Bitcoin's security is maintained by a decentralized network of miners who generate a massive hash rate, funded by block rewards and transaction fees. As the block rewards diminish over time, transaction fees are expected to increase due to limited block space, creating a competitive bidding environment for transactions. This fee structure is compared to real estate commissions, indicating that as demand for transaction space grows, fees will rise significantly. Despite fluctuations in transaction fees, mining operations will remain viable due to the sunk costs of mining equipment and the availability of low-cost electricity. The mining ecosystem is resilient, as miners will continue to operate even in bear markets, driven by the necessity of electricity and the perpetual demand for Bitcoin. The market for mining equipment will adapt, with prices dropping significantly during downturns, allowing miners with access to free or negative-cost electricity to thrive. The technological advancements in mining hardware ensure that the network remains secure, as the investment in mining is a one-way commitment to providing security for Bitcoin, making it an elegant and robust economic model.

Carte mentale

Vidéo Q&R

  • What secures the Bitcoin network?

    The Bitcoin network is secured by a decentralized network of miners who contribute to a massive hash rate.

  • How are miners incentivized?

    Miners are incentivized through block rewards and transaction fees.

  • What happens to block rewards over time?

    Block rewards will diminish significantly by 2035, with 99% of Bitcoin mined by then.

  • How do transaction fees work?

    Transaction fees are determined by demand for block space, with users bidding to have their transactions included.

  • What is the relationship between transaction fees and real estate?

    Transaction fees in Bitcoin can be compared to commissions in real estate, where higher fees are paid for urgent transactions.

  • What happens to mining during market downturns?

    Mining continues to be profitable due to the sunk costs of equipment and the availability of low-cost electricity.

  • How does electricity cost affect mining?

    Miners with access to free or low-cost electricity can continue mining even when market prices drop.

  • What is the future of Bitcoin mining equipment?

    The price of mining equipment tends to decrease significantly over time, making it accessible even during downturns.

  • How does the mining industry adapt to changes?

    The mining industry adapts by migrating equipment to areas with cheaper electricity and by utilizing advancements in technology.

  • What is the long-term outlook for Bitcoin security?

    The long-term outlook for Bitcoin security remains strong due to the ongoing investment in mining infrastructure.

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    bitcoin's secure because it has this
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    massive Diversified decentralized
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    network of Bitcoin uh security data
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    centers which we call miners but they're
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    really driving up massive hash rate to
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    secure the network they are uh
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    subsidized by uh a Bitcoin block reward
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    and they're also subsidized by
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    transaction fees the block rewards for
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    the most part run out after the first 30
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    years of the network you know between
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    2009 and you know and
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    [Music]
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    2035 we will have mined 99% of the
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    Bitcoin by
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    2035 so that's running down but the
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    transaction fees will grow and are
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    growing over that period because there's
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    a scarce amount of block space you can
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    maybe process 30,000 transactions an
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    hour and if you want to move your money
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    or you want to do that transaction
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    that's a limit you have to put a bid to
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    get your transaction in the next block
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    people are going to bid high if I want
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    to move a billion dollars I'll bid a lot
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    of money if I need the transaction to
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    take place I'll bid it up the more
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    people in the network the more demand
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    for that transaction bandwidth um what
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    would you pay to uh to sell $10 million
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    worth of real estate in New York City
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    today what you might pay a mill million
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    dollar you might pay a million dollars
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    in transaction fees the transaction fee
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    economy works just fine for Real Estate
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    right there's no block reward for real
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    estate people don't just get a bunch of
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    free real estate every 10 minutes for
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    being in the real estate business they
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    all work on the basis of a commission
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    the same is true in the financial
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    markets so there'll be commissions and
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    fees to trade there's a very limited
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    amount of transaction space the the fee
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    will go from a few dollars of
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    transaction action to $30 a transaction
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    to $300 a transaction to 3,000 to 30,000
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    to
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    300,000 and
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    and that being the case there's no
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    reason to think the mining ever stops it
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    will be more
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    efficient as of like in a world right
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    now I guess you have a trillion doll
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    asset class and the Bitcoin miners get
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    paid 10 billion a year so the cost for
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    the
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    security right 10 billion a year is is
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    like 1% right the fees will Trend to be
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    less than that and so that that 1%
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    security cost will probably become half
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    a percent a third of a percent a quarter
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    of a percent a tenth of a percent but
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    there's no reason why the revenues can't
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    go up while uh the value that's uh
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    that's protected goes up and the
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    incentive is always going to be to run
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    the equipment even if uh the transaction
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    fees aren't high once you've invested
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    $100 million in Bitcoin mining equipment
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    it's a sunk cost you can't repurpose it
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    to anything else if your electricity is
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    free and if you have $100 million of
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    equipment then it doesn't matter whether
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    you make a million a year 10 million a
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    year 100 million a year you would run it
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    for a million a year you would run it at
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    a 99% lower f price because a million a
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    year is still better than nothing A year
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    the electricity is worth nothing to you
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    a third of all the electricity in the
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    world is valueless it's it's wasted
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    stranded we've got too much like you
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    have a
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    damn nobody wants to buy electricity
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    from the dam the water just flows over
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    the
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    dam right or you can mine
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    Bitcoin so the the the the genius of the
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    network is everybody that gets into
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    Bitcoin mining does a oneway trade you
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    take a billion dollars you invested in
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    Bitcoin mining you can't get your money
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    out you can go bankrupt
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    the equity holder can go bankrupt then
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    the Creditor gets the Bitcoin mining the
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    credit the debt holder can go bankrupt
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    then the electricity company the power
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    company gets the mine the power company
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    can go bankrupt the nation state The
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    Sovereign that owns the power company
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    will own it if you notice electricity
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    companies never go bankrupt maybe
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    they're owned by the state or they're
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    owned by the country but people decide
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    they want electricity and they'll keep
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    running them there's no way to turn them
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    off and that's why even in a crypto
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    winner or bare Market the hash rate just
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    keeps going up it's a it's a one-way
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    silicon
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    ratchet
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    and it's like got an 8 to 10 year
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    natural
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    frequency it's like eight years after
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    the business became awful my equipment
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    starts burning out but you see even if
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    the equipment burns out like people
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    bought they would buy Bitcoin mining
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    rigs for $10,000 at the height of the
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    bull market and then the market price
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    crash and then they're buying the same
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    rig for $1,500 so the price of the
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    equipment will compress by
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    90% the price of electricity will go to
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    zero How does it go to zero everybody
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    that's just mining on expensive
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    electricity goes out of business so when
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    they go out of business where does their
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    equipment go it migrates to the next
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    buyer who's the buyer of Last Resort
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    someone that has free Power there are
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    actually places where there's negative
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    where the power is uh negative cost
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    where people will pay you to take the
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    electricity you know that that happens
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    on um solar and wind grids where uh the
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    sun is shining the wind is blowing and
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    we're going to burn out the grid unless
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    you take the power wow right you see
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    yeah you know and it happens if I'm
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    flaring methane gas or if I'm flaring
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    natural gas the regulator says to you if
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    you don't actually use this if you don't
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    cap the flare and use this then you have
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    to write off and close in the well and
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    then you take a $100 million write off
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    there's always going to be people that
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    are going to want to mine Bitcoin and
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    they will there will always be a market
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    for Bitcoin equipment that's used and
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    you you know you want to be a doomsdayer
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    well okay 10 years later all the Bitcoin
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    mining rigs all burn out what happens
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    well what happens is the big
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    semiconductor manufacturers like bitm
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    already have the engineering specs they
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    will sell this equipment at a at a
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    variable margin of 3% right you know
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    what does it cost for a 386 chip you
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    know or what does it cost for for 30y
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    old computer right at some point you
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    manufacture it for 5% of the original
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    cost it gets insanely cheap like they
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    put they put computer chips and greeting
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    cards now right M and so you're working
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    your way down this manufacturing curve
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    and this Moors law it's just like the
  • 00:06:57
    truth is guns are cheap they're too
  • 00:06:58
    cheap right you could buy a for $100
  • 00:07:02
    right that that works what you have here
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    is a network defended by technology and
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    the technology is a one-way function and
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    the hardware is one-way investment you
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    can't
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    unknow how to you know how to set off an
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    explosive you can't unknow how to build
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    an Asic but now that you know how to
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    manufacture it and now that you own it
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    what can you do with it there's only one
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    thing you can do with it the only thing
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    you can do with it is to is provide
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    security for Bitcoin so so it's a quite
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    elegant engineering design that I entice
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    so many Engineers to invest so much
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    money to Simply defend my economic
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    rights against those who would steal
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    from me
Tags
  • Bitcoin
  • mining
  • security
  • decentralization
  • transaction fees
  • block rewards
  • hash rate
  • electricity costs
  • market downturns
  • sustainability