Guellord MbusaAs with gold, the commodity that once served as a monetary standard, bitcoin (BTC) is rare and its quantity is limited. In total, there will only be 21 million BTC tokens and not one more bitcoin. This is part of the Bitcoin Fundamentals. You certainly know that new bitcoins are created by the process called minage. Thus the question of the total number of bitcoins leads to that of the future of the mining industry. The very last bitcoin will be carried out by the year 2140 according to estimates. You will certainly no longer be alive and neither will I.
So what will happen to the network and miners after the very last bitcoin is mined?
Bitcoin is “scarce” and it’s intentional
14 years ago now, whitepaper or bitcoin white paper was published on October 31, 2008. It is a document in which the famous anonymous and creator of bitcoin Satoshi Nakamoto explains the technical details of his invention. This is a complete report on the foundation and functioning of what has today become the first cryptocurrency.
In this document, the creator of bitcoin indicated everything about the first digital currency, including the limit number of bitcoins that must be mined and the importance of this scarcity.
Indeed, in order to create a true digital currency, Nakamoto had to rely on different foundations of the classic monetary system, including scarcity.
This is how the bitcoin algorithm was programmed to emit in the economic circuit 21 million BTC tokens and not one more.
Much more than theor, this limit of coins known in advance, makes bitcoin particularly attractive to investors. Unlike the total supply of gold which can increase if a new gold mine is discovered, everyone is aware of the fixed and stable supply of this digital currency. In addition to this limited supply, as time passes, bitcoin tokens become increasingly rare. This is what makes bitcoin a fundamentally deflationary currency.
—> Read the article: The difference between inflationary and deflationary cryptos
Mining Difficulty and Reward for Bitcoin Miners
Network security and the creation of new bitcoin tokens are carried out through the process of “ minage ". The bitcoin algorithm was designed in such a way that for each block added to the Bitcoin blockchain, the validator node is rewarded with a defined number of new bitcoins.
Practically, when a user invests in specific mining equipment (mining ASICs and graphics cards) and uses its computing power to validate transactions. He becomes the one we call a “ minor ». So for each block that this miner has to add to the blockchain, he will be rewarded in Bitcoin (BTC). This is the proof-of-work (PoW) validation mechanism. This is how miners regularly issue new Bitcoins to the market. This is how bitcoins are created.
What is hahsrate?
However, as time passes, what we call " mining difficulty ". We are talking about the increase in the "hashrate" (or hash rate) which measures the mining power of a computer, per second. It is then the speed of mining expressed in hash/ per second and the hashrate indicates the number of calculations per second that can be performed. This results in an expense in electricity and in the increasingly expensive price of mining equipment. At the same time, the reward for miners is getting smaller and smaller. This is also partly explained by the so-called "halving".
—> Read: How does hashrate influence the price of bitcoin?
Halving or the reduction of rewards for minors
In the bitcoin mining industry, the “ halving » designates the division by two of the reward that a miner receives for each block that he validates. This takes place every 4 years, i.e. after validation of 210 blocks. Since its creation, Bitcoin has experienced 3, the last of which dates back to May 2020. The next one will take place in 2024.
As of January 2009, XNUMX, during validation of the “ genesi blocks » of bitcoin or first block of bitcoin, the reward per block added was 50 bitcoins. This increased to 25 bitcoins during the first halving in 2012And then 12,5 bitcoins in 2016 and 6,25 bitcoins in 2020. The next halving is estimated to be in March 2024. It is thanks to this rate, and knowing the maximum number of bitcoins that will be mined, that we know when the very last bitcoin (BTC number 21 million) will be mined.
What future for bitcoin mining after 21 million tokens?
As we mentioned in the introduction to this article, there will only be a total of 21 million bitcoins. While more than 19,253 million bitcoins have already been minted to date, the remaining 1,746 will be increasingly difficult to extract. Moreover, this explains in part Why bitcoin price continues to increase over time: it costs more and more to “create”.
Despite the halving and mining difficulty, it is estimated that the very last bitcoin will be mined at the horizon 2140. What will happen when the maximum number of 21 million coins is reached? Many people ask this question. The unanswered question is whether the miners will stop the activity once the reward is zero.
Recall that in thebitcoin ecosystem, miners are the ones who make the software “run”. Without them, the network cannot exist. They have a crucial role in securing the network.
After 21 million tokens, will bitcoin mining remain profitable?
Before knowing why, you can already be sure that mining activity will not stop in 2140. Indeed, the entire Bitcoin network depends on mining. But, although after the very last bitcoin is mined, miners will continue to be paid but only thanks to the transaction fees validated on the network. This is why, even after the last bitcoin is mined, it is likely that a significant number of miners will continue to operate the network.
On the other hand, the bitcoin network is still in its infancy. It is possible that it will experience some evolutions and innovations. Indeed, since the Genesis Block mined in 2009, Bitcoin has undergone many evolutions. This is explained by the fact that it is an open-source software that is decentralized and "open" to modifications. Moreover, there are “Bitcoin Improvement Proposal (BIP)” which allow the community to submit proposals to "improve" the network. It is following a BIP that the lightning network was implemented for example.
So in the next 118 years, a lot of events can happen that could completely change the role of bitcoin mining.
Perhaps for example, mining will cost less and be less electricity consumer? Maybe even le mining equipment more accessible? It's entirely possible.
Final word on the future of bitcoin mining
The very last bitcoin will be mined in 2140. After this date, miners will continue to mine bitcoin to ensure network security and ensure block validation. So, no Bitcoin does not die out and we do not announce his death for the umpteenth time... Even if the miners' reward will now be zero, they will continue to collect transaction fees.
Well before putting an end to this article, It is important to emphasize that the bitcoin mining business is not simply about profit. Moreover, the future of the bitcoin mining industry depends on so-called “maximalist” miners. These are generally miners who give more importance to adding blocks to the blockchain than to the amount of BTC they earn as rewards. They do it more for the preservation and continuity of bitcoin, more than for selfish profit…
Regardless, after the extraction of the 21 millionth BTC, the mining industry on the Bitcoin blockchain will not stop because it depends on the commitment that industry players will have to support this monetary revolution.
Note: No financial advice is given in this or any other article on zonebitcoin. This is information of which you are the sole judge and master. Be responsible with your investments and only invest as much as you are willing to lose.
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