Selling shovels in a gold rush is a good strategy according to business advisers. That may apply to bitcoin too, with the shovel dealers being miners, who collectively are now making more profits than even some banks.
Our calculations show that miners are paid $4,826,318,715 a year by bitcoiners. That’s just in block rewards alone. With fees now at $5 per transaction, the actual tax on bitcoiners may be far higher.
We arrived at that number fairly easily. Bitcoins are minted on average every 10 minutes. Making it 144 blocks in a day, or 52,560 blocks a year. Each block is worth 12.5 bitcoin, thus miners receive 657,000 yearly, which is currently worth nearly $5 billion.
That translates to around 5% of bitcoin’s current market cap paid to miners every year, with fees added on top of it, further adding costs for bitcoin holders and investors.
In return, bitcoiners don’t really receive much except for a higher level of security, which may allow the network to handle more total value as the cost of attack increases.
However, it’s unclear whether the network, at some point, reaches a level where any further added security is simply unnecessary, but an equilibrium may be reached as the amount of bitcoins minted each block is to halve in 2020.
That would halve inflation too, with supply so reduced by 50%. If demand remains constant, then price might increase by 50%, thus keeping the amount miners receive at the same level.
But, despite receiving billions, network capacity remains at dial-up levels, with miners maintaining bitcoin’s network at just 2-3 transactions per second, raising fees to currently $5 per transaction.
There have been many proposals to change that, yet they have collectively rejected them all. With the latest proposal, segwit2x, currently appearing to be on some shaky grounds.
Bitcoiners, therefore, may continue handing over billions, on top of relatively very high fees, to the shovel dealers.