What happens when the Bitcoin supply runs out?

Since its appearance in 2009, there have been 19 million Bitcoin is mined, there is about 2 million Bitcoin left for future miners. Many people still wonder what will happen to the Bitcoin infrastructure and to the miners when the entire cryptocurrency is mined.

But the remaining 2 million Bitcoins will be the hardest to mine, as the amount of Bitcoins that reward miners for adding a new block to the chain will be halved every four years.

Bitcoin mining race will be more fierce when the supply decreases SCREEN CAPTURE

In 2012, miners were rewarded with 25 Bitcoins, by 2016, this number was only 12.5 Bitcoins. Currently, they only earn 6.25 Bitcoins per new block. Experts predict that by 2140, the supply of Bitcoin will be exhausted.

Scenario 2140

According to Investopedia, when the supply hits 21 million Bitcoins, no new Bitcoins will be created. New blocks will continue to form, but miners only receive a transaction processing fee, instead of being rewarded with both Bitcoin and transaction fees as currently.

Theoretically, if the Bitcoin network grows in 2140, Bitcoin miners can still manage to make a profit from transaction fees.

If Bitcoin in 2140 were seen as a store of value, instead of being bought and sold on a daily basis, Bitcoin miners would still make a profit even though no coins were created. They can receive higher fees when processing “huge” value transactions or a large number of transactions at the same time, by using a layer 2 blockchain solution like Lightning Network combined with blockchain Bitcoin to increase processing speed.

The block reward decreases every 4 years investopedia

That is just the most optimistic scenario for Bitcoin believers. The reality could be more bleak. In the event that Bitcoin mining is no longer profitable in any way, Bitcoin miners can collude with each other, trying to control mining resources and demanding higher transaction fees. Or they will use fraud in the mining process, such as collusion to jointly hide new valid blocks, and then release them as “orphan” blocks that have not been confirmed by the Bitcoin network.

During transaction confirmation, miners will continuously generate new blocks and add them to the chain. Blockchains can fork. The longest chain is the main chain with valid blocks. Blocks that are not on this chain are called orphaned blocks.

Hiding valid blocks can increase block processing time, so new blocks added to the chain will be charged higher fees.

By 2140, Bitcoin will be fully mined Screen capture

Problems ahead

According to CNBC, Bitcoin mining requires a lot of expensive machines, so miners or companies often use a part of the block mining bonus to cover operating costs.

But when the rewards are halved every four years, the cost of running the rigs will eventually exceed the bonuses they earn. This can happen even before the total amount of Bitcoin is exhausted. However, if the price of Bitcoin is increasingly increasing because of scarcity, they can still find a way to balance the costs.

Exhausted Bitcoin reserves will negatively affect those who invest and trade this cryptocurrency. The more scarce Bitcoin becomes because of the limited supply, the price of Bitcoin will rise beyond imagination, but the frenzy of buying and selling and the wave of FOMO (fear of missing out) will not stop.

Although Bitcoin is cleanly mined, it does not mean that 21 million Bitcoins are in circulation. According to blockchain analytics firm Chainalysis, one-fifth of Bitcoins mined is now lost because the owner forgot the access password. electronic walletor their Bitcoin hardware has been destroyed.