First, let’s quickly discuss what is mining. All transactions on the bitcoin blockchain are grouped into separate blocks (on the average there are about 1000-2000 transactions in one block ). To settle a block in the blockchain (and thus, to finalize all the transactions inside the block), the miner performs very complex calculations that require a lot of electricity. At the moment, generation of one bitcoin requires about 70 megawatt-hours, but this figure is constantly growing! When a miner settles a block on the blockchain, he gets a reward.
In mining, the reward for the work consists of two parts – the fixed part and commissions from transactions inside the block. The fixed part is equal to 12.5 BTC for each block, even if there are no transactions inside. And the commission for a transaction is set by the sender of each transaction. One can set a very small fee for a transaction, but there is a queue of transactions waiting to get into the block and limited space, and miners prefer transactions with larger fees. So a transaction with a small fee can take a lot of time to be processed and senders of transactions are incentivized to set larger fees.
It turns out that mining is similar to providing banking services, and the money is paid to a miner for processing transactions. This means that if there were no miners, it would be impossible to carry out transactions on the bitcoin network.
Another danger of having too little miners is the so-called “51% attack”. It is similar to the behavior of a shareholder who owns 51% of the shares. But instead of shares, there is the computational capacity of the bitcoin network. If at least 51% of the world’s miners unite, they will have more power than all the other miners put together. When conducting an attack of 51%, miners are able to rewrite any block on the network, revert any transaction, and in the end, to compromise the price of bitcoin and even drop its price to zero. Because after all, is there a value in a compromised cryptocurrency?
If mining bitcoin ever becomes not profitable, then the miners will have to switch to another cryptocurrency, leaving very few power on the bitcoin network. This means that there will be a lot of mining power ready to “attack” bitcoin at any moment. Not enough power will be left on the bitcoin network to defend it from the 51% attack.
If a cryptocurrency loses its protection from the 51% attack, it becomes almost useless. And in the case of bitcoin, it is not expected to become useless in the near future. Therefore, the mining of bitcoin HAS to always be profitable for bitcoin to stay alive. There is no understanding of how this should happen. Either fixed payments will be increased, or the cost of bitcoin will grow along with the complexity of mining. But it will definitely happen if bitcoin is set to live.
Although the mining of bitcoin will not die, it can for the short periods of time become not profitable. Most people calculate profit from the mining process by converting the mined bitcoins immediately into dollars, but this does not make sense, because the exchange of bitcoin happens when you sell it, not when you mine it. First, it is technically impossible to convert bitcoin into dollars as soon as you mine it. Secondly, many miners practice deferred sales with a delay of three or more months. The difficulty of bitcoin mining is constantly growing, and the amount of bitcoins you mine per month constantly decreases. If today you mine 1 bitcoin per month, a month later you will mine only 0.9 bitcoins. Usually, the price of bitcoin increases with difficulty, so it makes sense to convert today’s results of mining using some future predicted bitcoin price.
So, as we believe, mining will be always profitable while there is bitcoin. Bitcoin, apparently, is not going to disappear, given its advantages over the ordinary currency. In the near future, many shops, cafes, restaurants, hotels, etc. will accept payment in a bitcoins, as there are a number of significant advantages of doing so. This means that the usage of bitcoin will only develop, and with it, the mining.