Ah, the Bitcoin network. A beautiful symphony of cryptography, decentralisation, and…sometimes whiny miners? Yes, miners play an essential part in this ecosystem. What started as part of the Bitcoin core system, where everyone would mine themselves as part of running a node, has spun off into a specialised service and legitimate business.

While Bitcoin miners come in all shapes and sizes, those that are providing the majority of the hash rate are large industrial players who have sunk millions into their operations with the only aim of producing as much computation as possible.

Without a doubt, they provide a valuable service; they ensure that blocks are reliably secured and ensure there is a considerable barrier to overcome if you wish to attack the network.

The Bitcoin network essentially hires miners to provide security and computation and are paid from the fees generated by transactions and the newly minted Bitcoin from the block subsidy, which recently halved to its lowest issuance rate yet, 3.125 Bitcoin per block.

Every time the Bitcoin rewards are cut in half, you’ll find a cohort of miners who fall into the unprofitable range and have to close up shop, and when they approach those ranges, you’ll hear those miners cry bloody murder and look for a bailout.

While some serious discussions have been on miner sustainability and the fear of a possible doom loop of mining capitulation, some solutions venture into the camp of never going to fly.

For those unfamiliar, the HODL_Fee is a brilliant (note the sarcasm) idea where inactive Bitcoin wallets – the so-called HODLers – are magically taxed to subsidise miners.

You read that right.

Apparently, because some miners can’t turn a profit verifying transactions, they’ve decided we, the responsible hodlers who are actually using Bitcoin as intended, should be their personal ATMs.

It’s rather ironic considering that the genesis block is famous for encoding “Chancellor on the brink of second bailout for banks”.

And it really seems like a non-starter if you’re talking to a community of highly idealistic node runners, but let’s humour the idea and unpack this steaming pile of FOMO (fear of missing out) fueled nonsense, shall we?

...read more at thebitcoinmanual.com