Bitcoin’s acceptance and use are growing. Despite the excitement of computer experts and journalists, even amongst those who trade cryptocurrency, few predicted Bitcoin’s extraordinary rise in 2021. This pattern is unlikely to alter very soon. So far, more than 19 million bitcoins have been successfully mined.
What happens when all the bitcoins have been mined is one of the most baffling problems. When less than two million bitcoins are now in circulation, it’s simple to see why this is such a significant issue. This page covers what happens after the final bitcoin is mined.
How Lucrative is Bitcoin mining right now?
There are around 19.07 million bitcoins in circulation as of June 2022. This indicates that more than 90% of all bitcoins have been mined, with only 1.92 million bitcoins still to be discovered. The total number of bitcoins in circulation was set at 21 million when Satoshi Nakamoto founded Bitcoin in 2008. Limiting the number of bitcoins that could be created helped to ensure that the currency never experienced inflation. Because bitcoins, like paper money, are meant for use in transactions, an oversupply might result in significant price fluctuations.
Due to supply and price fluctuations, Bitcoin’s creator set a limit of 21 million bitcoins
One suggestion for retaining control was to release bitcoins in stages rather than all 21 million at once. To do this, the bitcoin code was made to limit the number of bitcoins that can be mined each year until all 21 million bitcoins are gone.
Bitcoin mining employs a complicated algorithm to guarantee system stability by enforcing a 10-minute deadline for discovering new blocks, after which newly mined bitcoins enter circulation and are added to the blockchain. The network automatically changes the difficulty of bitcoin mining every 2,016 blocks, or about every two weeks, depending on whether the number of miners has gone up or down. This is done to keep the block time at about 10 minutes.
Halving bitcoin
In order to ensure a stable supply of bitcoins, Satoshi Nakamoto created the notion of “halving.” As a result of this process, the bitcoin supply is roughly half every three years and nine months. If current rates of production continue, all 21 million bitcoins will have been mined by 2078. That is, there will no longer be any bitcoins to mine.
What happens once all the bitcoins are mined? This is a question that has prompted much debate. When you search for the answer on Google, you will find that the year 2040 is suggested instead of 2078. This is partly due to unofficial research that shows the halving occurs every four years rather than every three years and nine months. If the current pattern of halving stays the same and nothing else changes, the maximum number of bitcoins will be mined around 2078.
In March or April 2024, the protocol expects to repeat the halving, dropping the block reward to 3.125 BTC. Keep in mind, however, that not every bitcoin issued thus far is in circulation, which decreases the total number of bitcoins in circulation at any one time. Due to various problems, the number of bitcoins in circulation does not match the number of bitcoins that have been made.
The way Bitcoin is stored is a crucial concern. Because wallets and passwords are required to use Bitcoin, if the owner passes away, no one will be able to access the bitcoins held in the wallet. Other errors committed by its owners may result in Bitcoin becoming indefinitely unreachable. Unlike other assets, Bitcoin cannot be retrieved without the owner’s permission.
According to a recent “New York Times” investigation, more than 20% of bitcoins are held in cold wallets. These stranded bitcoins are worth approximately $140 billion. For the foreseeable future, these bitcoins can’t be used for transactions, which will reduce the number of bitcoins that can be used.
If you’re ever asked how many bitcoins are in circulation, the easy answer is to subtract the number of bitcoins locked up in untraceable wallets from the total amount of bitcoins in circulation, which is presently about 19 million.
The final total
Even if there were no stranded bitcoins, reaching a total of 21 million once all bitcoins have been mined is technically impossible. The real amount will be very close to Bitcoin’s maximum supply. This is due to the fact that the precise number of bitcoins in circulation is never revealed. In contrast, the Bitcoin algorithm truncates decimals to the nearest integer. As a result, the value of 6 reflects a supply of 6.2589 bitcoins.
One bitcoin is equal to 100 satoshis. Satoshis are the smallest Bitcoin units, equal to one hundred millionth of a bitcoin. Because of smaller units and rounding-off figures, analysts predict that instead of 21 million bitcoins, the maximum supply will be limited to 20,999,999.
Is Bitcoin limited?
In the absence of action by stakeholders, the total number of bitcoins and the maximum number of bitcoins available for mining would remain unchanged. Satoshi Nakamoto created Bitcoin as a free and open-source project. If stakeholders agree to change the code, anyone concerned about the potential consequences after all bitcoins have been mined may be able to increase the bitcoin limit. No matter why the change is being made, the possible results are highly debated and controversial.
Reasons for expanding Bitcoin supply in general
The immense financial incentive that awaits those miners who can extract the most bitcoins from the network is the primary reason for bitcoin mining’s appeal. Miners get paid a share of the bitcoin supply on a regular basis (block rewards). In addition to bitcoin, miners get a share of the transaction fees earned by each block that is processed successfully.
At the time of its launch, validating a block of transactions was worth 50 bitcoins. Four years later, this dropped to 25 bitcoins, and the cycle will continue until no more bitcoins are available.
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