(On Legitimacy of Blockchains - 4)
Besides, the fact that mining a block in a PoW blockchain requires the miner to pay high prices for electricity (due to high consumption of energy) implies that virtually no one will be willing to undertake the mining work once the cost of mining exceeds the amount of reward they are guaranteed to receive in exchange.
Let's take BTC (Bitcoin) as an example. After the end of each half life, its mining reward halves. This means that, eventually, only the transaction fee itself will be the sole compensation being handed over to the miner. If the transaction fee is too low, miners won't be willing to mine because the cost it takes to receive the fee will be greater than the fee itself. If the transaction fee is too high, people won't be willing to trade with the blockchain's unit of exchange anymore. Either way, a PoW-based blockchain with a hard limit in its total supply of currency in circulation (such as Bitcoin (BTC)) faces a huge risk of eventual collapse.
One could suggest that keeping the base mining reward at a reasonable level aside from the half-life cycle will fix the problem, yet it inevitably creates perpetual inflation. Sure, it won't be too much of an issue if the rate of inflation is not too drastic. But, will it be really possible to keep the rate of inflation sufficiently low while also presenting miners with a constant base mining reward that is higher than the cost of electricity and the necessary human effort combined? I am not exactly sure about this, since it involves so many macroeconomic factors.
A potential solution to this dilemma would be to "burn off" a portion of each transaction's incurred fee for the sake of partially cancelling out the rate of inflation. This, however, is hardly anything more than a blockchain equivalent of the daylight-saving time. In order to drain part of the currency in circulation, either the staker or end user will still have to pay additional fees which are to be burned off.