What will happen after mining all 21 million bitcoins?
Many people compare Bitcoin with gold for various reasons. Like gold, people can’t create this virtual currency arbitrarily. Instead, they must extract or work hard to earn it. People can physically mine gold from the ground. However, they use computational means to mine this digital currency.
Satoshi Nakamoto set stipulation for Bitcoin in source code. The creator of this cryptocurrency stipulated that its supply must be finite and limited. Therefore, miners will generate 21 million bitcoins only. What’s more, the network fixes the introduction rate for bitcoins to the cryptocurrency supply, comprising a single block within ten minutes. Additionally, the number of tokens that miners release in these blocks reduces by half every four years.
Bitcoin’s Limited Supply
As hinted, miners can produce 21 million bitcoins only. After that, they will have exhausted the Bitcoin supply. But, there’s a possibility for changing Bitcoin’s protocol to facilitate a larger pool. However, many people wonder what will happen once the overall Bitcoin supply hits the limit. Well, cryptocurrency fans consider this subject debatable.
Currently, the world has 18.5 million bitcoins in circulation. That means miners are yet to introduce less than 3 million bitcoins. But though the world will have 21 million bitcoins only, some people have died without sharing private key details with anyone. Others have lost private keys and, therefore, can’t access their bitcoins. Thus, the world could have less than millions of bitcoins in circulation.
Rewards for Mining Bitcoin
Miners have produced 18.5 million bitcoins within ten years since Satoshi Nakamoto introduced the network. Since miners have 3 million more bitcoins to go, this virtual currency could be in its final mining stages. And this could be true, though, in a sense, that’s limited. Even though miners have produced the majority of this virtual currency, its timeline is complicated.
Bitcoin mining rewards miners with a block of bitcoins once they verify every chunk of transactions. And this process continues to adapt over time. During its launch, the network rewarded miners with 50 bitcoins. However, the network halved this reward to 25 bitcoins in 2012. Another halving happened in 2016, with miners getting 12.5 bitcoins. By 2021, miners got 6.25 bitcoins after mining every new block. Based on Bitcoin’s value in February 2021, 6.25 bitcoins amounted to $294,168.75. The halving process lowers the inflation rate for this virtual currency by half every four years.
The Bitcoin network will keep halving the reward every four years until miners generate the final Bitcoin. And miners are unlikely to mine the last Bitcoin until around 2040. Nevertheless, the Bitcoin network can change this protocol depending on how the cryptocurrency develops.
However, the mining process rewards miners for producing new tokens. However, the reward size decreases periodically, thereby controlling new tokens’ circulation.
Effects of Finite Supply on Miners
The limited Bitcoin supply affects miners the most. That’s because instead of mining this virtual currency, most people purchase this cryptocurrency on platforms like Bitcoin Circuit. Such crypto exchanges allow people to buy, sell, or trade Bitcoin using fiat money. After registering, a successful the https://bitcoin-profitapp.com/ enables you to load fiat money into your account and then start trading Bitcoin.
Nevertheless, this doesn’t deter some individuals and companies from mining Bitcoin. Some detractors, however, argue that the network will force miners away from their block rewards after hitting the 21 million mark.
But, miners are likely to competitively and actively validate transactions even after producing the last Bitcoin. That’s because every transaction comes with a transaction fee. Although these fees represent a few dollars for every block, they may increase to thousands of dollars since Bitcoin transactions are growing globally. What’s more, Bitcoin’s price continues to rise. Nevertheless, how this unfolds is a matter of time.
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