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Long-term profitability of Bitcoin protocol

Assumptions

  1. The Bitcoin ecosystem must remain stable and profitable for all agents engaged in its day-to-day operations with no extra incentive except transaction (Tx) fees.
  2. Long term means after year 2040, when block reward will be 0 BTC (currently at 50 BTC).
  3. Maximum Bitcoin Tx fee should not exceed 1% of transaction volume. Otherwise it will not be competitive with current fiat-money transaction systems.
  4. Miners’ expect positive average operating profit margin, so let us assume a minimum of 1%. Currently at 29% +/- 30% [i]
  5. Current exchange rates: BTC/EUR 8.39 and BTC/USD 10.74

Let us evaluate current long-term Bitcoin profitability in light of  those assumptions and some statistics.

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