What will happen to Bitcoin after all of them are mined?

Here is the fascinating fact: to mine almost 19 million Bitcoins took just about 13 years. Yet, it will take much longer to get the rest. Mathematical calculation showed that the last token will be received in 2140, that is, in no less than 119 years. As you can see, investors still have time to get involved in an interesting and profitable cryptocurrency trading process.

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BTC Mining Process Today

The current mining BTC coins technology is ASIC (Special Purpose Integrated Circuit). Mining is a competitive and complex industry. Each node seeks to be the first to complete the transaction, add to the block and receive a reward. For nodes, the use of ASICs means a significant increase in income from mining cryptocurrencies. Bitcoin nodes can mine BTC with a higher hash rate.

Halving

Halving is the process when the reward for mining Bitcoin transactions will be halved.

This event also halves the Bitcoin inflation rate and the price of new Bitcoins.
Both previous halvings were correlated with intense boom-bust cycles that ended at higher prices than before this event.

The first time after the launch of the Bitcoin network, the block mining reward was at the level of 50 BTC. For every 210,000 new blocks, miners' fees are reduced by 50%. The regularity of the reduction in payments takes place once every four years:

year	Production reward size
2008	50
2012	25
2016	12.5
2020	6.25

The next halving is scheduled for 2024.

What Will Happen When the Last Bitcoin is Mined

At the time when the last BTC coin will reach its owner, the miners will not turn off the equipment. On the contrary, they will continue to process transactions. Then it will not be the Bitcoin network that will pay the reward, but the users - in the form of a commission.

Will mining the main cryptocurrency be a profitable venture? The question led critics to debate the future of Bitcoin nodes. When block reward payments stop, miners will only have to rely on transaction fees to stay afloat.

Over-reliance on payments for transactions on the blockchain will make it impossible to mine the main coin and will lead to a reduction in the number of nodes, hypothetical centralization of the network, and even a complete collapse of it.

Analysts from JPMorgan Chase & Co found that the cost of mining one coin exceeds the actual price of the Bitcoin itself. Bitcoin mining is an expensive process due to high fees and specialized equipment.

Nodes can receive block rewards until they get the last Bitcoin. After 21 million coins have been "mined" there will be no circulation of the new Bitcoins. As of October 2021, a little over 18.8 million coins were produced. It is equivalent to 88.3% of the maximum volume. And only after 120 years, the miners will get the last BTC coin. The complexity of mining is associated with a gradual decrease in the speed of creating new Bitcoins - halving.

What Miners Will Do

So, after all BTC is mined, the network will operate in the same algorithm as it is now, but with one important difference for miners.

They will still be able to participate in the block discovery process, but they will no longer be incentivized by rewards - but this does not mean that they will not earn anything. There are also commissions spent by users on transactions and included in each newly discovered block.

Currently, fees for transfers on the Bitcoin network represent a small portion of miners' income. It would seem that everything will lose its meaning - but it is not.

Moving to an algorithm based solely on commission income will almost certainly destroy the mining industry right now, as miners will not be able to profitably mine bitcoin if they only receive 6.5% of the current profit.

If the use of the Bitcoin network increases dramatically, then the competition for blocks will become more intense. According to ByBit CEO Ben Zhou, this is likely to lead to an increase in transaction fee rewards for miners - similar to what was observed in 2017.

In fact, it works the same way as with halving - it would seem that miners' rewards fall by half, but at the same time, they only start earning more every time. Everything is compensated by the growth of the rate and the demand for cryptocurrency.

This is a fact - just look at the miners' profit graph. In 2021, they began to earn more than ever, despite the May 2020 halving, which could not negatively affect the profitability of bitcoin mining - recently, miners earn an average of more than $ 50 million daily. In 2020, this figure was $ 12 million.

Security

When halving occurs, miners' revenue in BTC is reduced by 50%. As in any other industry, the loss of such income can have an extremely negative impact on the business. In the case of Bitcoin, mining directly ensures the security of the network, so node bankruptcy can jeopardize the reliability of the blockchain. Since block rewards eventually dwindle to zero over time, skeptics believe that low income for miners could lead to a decrease in the security and value of the Bitcoin blockchain itself.

Commissions

The nodes' income consists of block creation rewards and transaction fees. The mining pay is reduced by 50%, but the confirmation of transactions is not. If Bitcoin is introduced into projects, the demand for operations on the network will grow. Fees are expected to rise and offset the costs of Bitcoin miners. Cryptocurrency users will create transactions, so the work of nodes associated with confirming actions on the network will be rewarded.

The Final Thoughts

The limited emission of 21 million Bitcoins is intended to contain inflation, which occurs if the supply is not limited. Cryptocurrency is becoming a scarce commodity, so its prices are constantly rising.

It is more likely that miners will earn on transaction confirmation fees after Bitcoin reaches its supply limit.

There is no guarantee that any of these predictions will come true. The pace of development of the cryptocurrency market shows that it is impossible to predict its future accurately. For example, there is a theory according to which the protocol of the main cryptocurrency will be changed when the limit on the issue of BTC ends. There will be an opportunity to mine more than 21 million Bitcoins.

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