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matte_black

What happens when the Bitcoin mines close down?

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A lot of miners lose their jobs.

Nothing. The system will adjust difficulty and will continue working.

There can't be transactions, so nobody can move bitcoins around.

There is an adjustment every 2016 blocks, roughly 14 days (under the assumption that a block is mined every 10 minutes). When too many miners drop out, the block time will increase until 2016 blocks are mined and the difficulty readjusted. So transactions can be made, they simply will take longer.

In the possible but unrealistic scenario of all huge miners disappearing overnight right after an adjustment and thus making it impossible to reach 2016 blocks, the users will offer higher transaction fees and so make mining profitable again (or, at least, provide incentive to the miners to come back).

What you describe as an equilibrium really involves lots of disappointed people whose transactions take far longer than expected. Some wallets probably don't support CPFP, lots of people don't have any idea where to look for features like this.

While the system will ultimately reach stasis eventually, it will be seen as an "outage" that will end up playing to many altcoins' strengths (more frequent/softer difficulty adjustments, no-PoW coins, etc).

> that will end up playing to many altcoins' strengths

So what, then the difficulty gets adjusted and that's it. People won't stay on altcoins except for speculation, they're not usable anywhere except on trading platforms or, in case of Dogecoin, on Reddit. The "big whales" BTC, ETH and LTC have sucked up the market - most of the other currencies can't even be directly traded against the dollar but trading has to be done against BTC... thus, whenever BTC drops, everything else drops.

The problem is/will be that BTC has lost its value as an usable payment instrument due to high tx fees, confirmation time and the ridiculous price volatility. I hope this will reverse a bit.

[disclosure: holding ~500€ in BTC]

Not exactly.

If a large percentage of miners stop mining, the difficultly will be adjusted so it's easier to mine Bitcoin. The difficulty is tuned such that blocks are solved every 10 minutes, regardless of how many miners are working.

One problem is that the time required for the adjustment to happen is determined by how many miners are left and is unbounded.

Why am I getting downvoted!? The question is what happens if (all) miners shut down. To me, it does NOT seem to be asking what happens if some miners begin to fade out.

I'm sure my answer is technically correct. Transactions only happen if a block is mined. If all miners suddenly stop mining, there are no blocks mined, there are no transactions, all bitcoins are frozen.

I understand this seems an absurd situation, but this was the question, or have I misunderstood it?

The question wasn't specific about the number of miners stopping operations. At 0 miners indeed transactions will halt and only resume when somebody starts mining again. As the number of miners reaches zero it will become trivial to perform a >50% attack. It will be much simpler to replace the 'legitimate' block chain with an own one as nobody will be there to check it. I up voted your answer.

Thanks, I see now, OP's asking about mines, not necessarily miners (though I guess it's a bit hard to distinguish... if I mine, do I have a mine? how many cores should I have to qualify that as a mine?)

Anyway, on the >50% attack, I'm not totally in agreement. The attack can drop transactions, but can't forge any (which, btw, goes towards the "there won't be transactions"). If the network would ever restart, it will be eventually verified.

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