In Bitcoin, miners earn from block subsidies and fees. Why is it worrisome when the Bitcoin subsidy is zero?

There is an attack possible: undercutting attacks. There is a strong social convention not to undercut, and also the miner subsidy needs to extend the change.

If the costs of mining are high, you start seeing bad behavior. The Princeton paper, defines a game in which you can choose the number of miners using a possession distribution.

Miners can choose which branch to follow:

• Nakamoto honest miners
• Undercutting miners
• Petty honest miners: they share similarities with honest miners, but they are greedy.

We have seen some scenarios with insane fee rates but no undercutting yet.

Holders can incentivize miners' behavior.

Nobody uses "fried" coins → fried coins experience demurrage over time.

Tail Emission

• The idea behind tail emissions is that miners will leave the network and stop pointing hash rates to it if their rewards begin to dwindle.
• Holders should be taxed based on the age of their coins.

Research is independent of the price of Bitcoin at that time.

• 2016 Princeton paper: https://dl.acm.org/doi/abs/10.1145/2976749.2978408
• Budish paper: https://ericbudish.org/publication/the-economic-limits-of-bitcoin-and-the-blockchain/
• Claire's thesis on Undercutting Attacks: https://static1.squarespace.com/static/59aae5e9a803bb10bedeb03e/t/664f8c0690e83d790679a521/1719943974451/bao-claireb-meng-eecs-2024-thesis+%281%29.pdf
• Aviv's paper

F2 Pool is interested in sophisticated software.