This assumes the cost of mining hardware is negligible compared to the electricity cost of mining. I'm not so sure that's a good assumption.
Even if someone gave you mining hardware for free, without a subsidy and with an empty mempool it wouldn't be profitable for anyone to mine
Yes... My point was: if hardware is expensive and electricity is cheap, you wouldn't want the hardware to sit idle. You'd mine all the time, even when the rewards are low.
Sunk cost fallacy. Once you have mining hardware all you care about is variable costs. Mining hardware costs only affect whether you buy more hardware.
But is it profitable to buy hardware, knowing that it will only run some of the time, when the mempool gets extra full? Maybe. Depends on both the hardware cost and the variable costs.
It does seem inefficient for miners to turn on and off so frequently
In any case, I agree it will be more profitable to mine when the mempool is bigger, but the *degree* to which miners will smooth over block-time variability depends on their costs.
Even fees on BTC aren't high enough to make a considerable difference in profitability, the block reward holds the majority of the value, and mining is still profitable in many areas
The thread was about when the fees become much larger than the subsidy
