If you are looking for an answer to this query, “What happens when all Bitcoins are mined?”, then here, you will find your detailed answer. Bitcoin (BTC) has a total supply of 21 million Bitcoin. A large portion of total BTC has been mined which is around 18.9 million BTC. Satoshi Nakamoto was the creator of Bitcoin and he kept the total supply fixed to make the currency valued. However, because there is only a limited amount of coins to mine, there are questions about what would happen to the Bitcoin ecosystem once all BTC are mined.
A reward of one Bitcoin is provided to the supply after one block per 10 mins rate. Unfortunately, the BTC working mechanism reduces the number of new bitcoins rate by half after every 4 years.
Mining of Bitcoins
There are approximately 19 million BTCs have already been mined and 2 million BTCs supply has to be mined for the future. These additional bitcoins are expected to be extracted by 2140 according to researchers.
Miners are crucial in the creation of new bitcoin tokens because they perform cryptography problems in order to confirm and authenticate a chain of transactions on the network. Miners receive transaction incentives in exchange for their contributions to the network, which include newly generated bitcoin and the total processing fees collected in a block.
The Miners are facing only a major issue that after every four years, the block incentive is approximately halved. In 2008, the Bitcoin mining reward was 50 BTC per block. It was reduced to half (25 BTC) in 2012 and 12.5 BTC in 2016. Miners might receive 6.25 BTC for each new block in May 2020.
The mining step includes completing complex math riddles, which necessitates the use of high-end processing machinery (such as GPUs and CPUs), which consumes a lot of energy. The money earned from the block incentive is used by the miners to cover the mining cost and earn a profit.
Unfortunately, because the benefits are half after every four years, the cost of operating the business will soon surpass the miners’ income. Mining may become an unsustainable economic system for them as a result of this.
However, because only a small number of transactions may be validated every 10 minutes, transaction costs will eventually increase and this can compensate miner’s block incentive. Miners might also employ development to improve energy efficiency and reduce costs in the mining industry.
When all of the 21 million Bitcoin is mined then mining fees will be eliminated. Instead of a mix of block rewards and transaction fees, miners are more likely to receive money solely from transaction processing fees.