Part III of TradeBlock's Bitcoin network capacity analysis. This time they explore Miner compensation and the incentive structures underlying mining efforts and the potential effects of an increased block size limit on miner’s willingness to participate in the network.
This is a continuation of TradeBlock’s block chain and network analysis to address the ongoing block size discussions. It is intended for an audience with at least a fundamental comprehension of block chain technology. If you have not yet done so, we recommend first reading: Part 1: Macro Block Trends, and Part 2: Macro Transaction Trends Part 3 – Miner Incentives Bitcoin miners play a critical role in the bitcoin ecosystem by processing and securing payments. They’re rewarded for their efforts by a combination of newly issued bitcoin and transaction fees. The analysis below explores the incentive structures underlying mining efforts and looks at the potential effects of an increased block size limit on miner’s willingness to participate in the network.