How is it gamed?
There is a cycle time for the algorithm to adjust difficulty. So it can be pumped like an engine with bursts of blocks creation then backing off, then bursts of blocks creation. Already six months have been taken off the life of when 21 mil is hit.
What would be the expected effect of mining with free energy on velocity and fees?
As the awards diminish and only transaction fees remain the zero variable cost producers drive out all the others. They become a cartel able to push losses on competion. This gives them pricing power for transaction fees. As transaction fees increase the value drops. This reaches a point which maximizes the amount they can receive, with rate of transactions and transaction fees set to optimal levels for them. We have already seen retailors pull out because of transaction fees. When your own advocate conferences stop accepting the currency because of high transaction costs you know you have a problem. And this is still during times while there is stll an award. Think forward to time when it is transaction fees only.
https://news.bitcoin.com/miami-bitcoin-conference-stops-accepting-bitcoin-due-to-fees-and-congestion/Miami Bitcoin Conference Stops Accepting Bitcoin Due to Fees and CongestionNext week the popular cryptocurrency event, The North American Bitcoin Conference (TNABC) will be hosted in downtown Miami at the James L Knight Center, January 18-19. However, bitcoin proponents got some unfortunate news this week as the event organizers have announced they have stopped accepting bitcoin payments for conference tickets due to network fees and congestion.Net,
with bitcoin one holds an assett whose liquidity is directly controlled by another entity, the miners. The only way out of this is to institute inflationary mining cycle, that is reinstate significant miner awards so ineffecient miners can compete. This again caps value but not all returns will accrue to a handful of players.
This is a fundemental flaw in the thinking of the architecture of the currency. They did not predict zero variable cost producers. The currency depended on assumption that there would be cost in terms of time and electricity to process transactions that would be supported by a competitive bidding market.
There is no limit to Bitcoin. If a limit ever was a threat to the Bitcoiners they would just do another fork (already done 3 [Cash, Gold, SV]). The dev team can print them out of thin air just like greenbacks. They are not a limited commodity like coal or oil or even goat poop.
Yes. There is a reason bitcoin has lost 75% of its value vs other currencies. And that is simply that it has become clear that it is not decentralized, just dispersed.