Last Bitcoin Mined - What Will Happen?
Bitcoin hits all time high! How far can BTC go? And how quickly will we see another BTC-Rally? All these questions are floating through the minds of BTC investors. But in this article, we want to cover another question. What will happen when the last Bitcoin is mined? Like we all know BTC has a maximum supply of 21 million and I will try to outline the possibilities that could occur when the last one is mined.
When will it happen and what happens then?
Like we all know, BTC is given as a reward to miners for processing transaction on the Bitcoin Blockchain. New BTC are issued every time a new Bitcoin block is mined, and the Bitcoin code ensures that this happens roughly every ten minutes by adjusting the mining difficulty depending on how many miners there are. Furthermore, the Bitcoins halving are reducing the block reward by 50%. Such a halving happens every 210k blocks. These halvings are significant because the sudden reduction in new BTC supply cause an eventual spike in the price of BTC assuming demand for BTC stays the same or even increases after the halving happened.
Anyways, these halvings can not keep happening for ever because like I mentioned in the introduction, the maximum amount of BTC is 21 million and this limit is built into Bitcoin’s code. Which brings us to the question: When will the last BTC be mined? If you google the answer, then google will tell you it will happen in the year 2140. For this calculation it is assumed that each BTC halving is happening every four years. If you would look closer at the dates you would recognize that these halvings are not exactly four years apart but only three years and nine months. So if you would assume the 3.75 years as the time span for the halvenings then you would get the year 2078 for the last BTC to be mined.
When there is no more BTC to mine there will be no more economic incentives for miners and the Bitcoin network will die. Due to the fact that the entire cryptocurrency market is dependent on Bitcoin every cryptocurrency will go to zero. Just joking! I got you there, you can admit it! Lets brake this down: First off, Bitcoin dominance has been dropping over the past years which suggests that BTC will not be the largest cryptocurrency by market cap in 2078. That means that the rest of the crypto market will not be as depended on it anymore. Also, besides what the BTC miners get from each new Bitcoin block they also earn fees as compensation for processing transactions. It can be found that miners are earning something between 0.5 and 1 BTC per block on transaction fees alone. Many people are thinking that by the time the BTC supply runs out that these transaction fees will be enough to sustain the network. There is just one problem with this hypothesis. Given that Bitcoin can only process seven transactions per second it is very unlikely that is going to become the payment network that is used for microtransactions.
Possible Solutions
One of the solutions could be a layer 2 solution like the Lightning Network, which I described in another article of mine (Article). The main problem for the above explained scenario would be that those layer 2 solutions would reduce the number of transactions and hence reduce the transaction fees for the miner. With this being said, it is pretty clear that the idea of Bitcoin is now as a store of value and not as a payment solution. This means that the BTC network has to survive without the transaction fees. This could be included in the next solutions.
Sustaining a proof of work network like Bitcoin’s requires a lot of computing power and a lot of electricity. These make up the bulk of the operating expenses of crypto miners around the world. This is also why most of the mining farms go to countries and regions with cheap energy. Even though we just mentioned that the bitcoin blockchain can not survive on transaction fees alone, it is under the assumption that the cost for mining will be the same when we run out of BTC to mine. However, it is very likely that energy will become cheaper and technology will become more efficient in the coming decades. You just have to take a look at El Savador that is now using Volcanoes to mine BTC.
Economic incentives are not the only thing that could keep the BTC network afloat either. With the ongoing cryptocurrency adoption, big banks and even the public sector like governments will have all the incentive in the world to make sure the Bitcoin network remains secure and operational. If public institutions hold BTC after the last one is mined and they find out that the miners are about to shut off their mining rigs because they are not making profits, they would not hesitate to pump some money into these mining rigs to keep the whole thing going. Another way could be that they will start their own mining operation to sustain the Bitcoin network.
The next possibility would be to migrate BTC onto a smart contract blockchain like Ethereum. This would be possible with the Wrapped BTC Token that are available as ERC-20 tokens on the Ethereum blockchain. This locks the coin on its native blockchain to mint an equivalent number of ERC-20 tokens on Ethereum.
One last solution could be to increase the maximum amount of BTC. Technologically it would be possible to do this as long as there is a consensus from the economic majority. That includes all economic participants holding or mining BTC as well as developers and users.
Conclusion
As we have seen in this article, BTC has more than one way of surviving the day those BTC mining rewards run out. I doubt very much that this will happen in my lifetime but if it will I have no fear of this happening. I think the ongoing adoption shows that crypto is here to stay and it will not go without a fight and not because of a technical issue. What do you think, which solution would be the best or do you have a different solution to this problem?
Published by ga38jem on
Publish0x|LeoFinance|Steemit|read.cash
On 25th October 2021
Sources:
https://www.cmcmarkets.com/en/learn-cryptocurrencies/bitcoin-halving
https://decrypt.co/34876/why-is-bitcoins-supply-limit-set-to-21-million
Greetings @ga38jem
I think I now understand the major reason behind the increasing worth or value of Bitcoin after reading your post. The fact that Bitcoin halving is being implemented will definitely make Bitcoin become more scarce and this makes miners tend to mine low quantity of BTC after every halving process.
Most people and even top companies can't do without making use of BTC despite the fact that it's getting more scarce, the increasing demand and less supply will definitely make BTC become more valuable with increasing price as time goes on.
Thanks for sharing this great post with love from @hardaeborla and I hope you have a great day ahead ❤️💕❤️
Most likely BTC will continue to rise in price, with the variables that you explain in this post maybe it will be sooner than many of us think.
Greetings and thanks for this valuable post.
ahahahahahaha after all that excellent analysis you doubt that it will happen to you? well we all know that in this crypto world many things are possible.
thanks for sharing, good luck
First of all 2140 it's a long journey , most of the crypto users will not be hear to see that happening as currently it's 2021 and those who have joined the crypto space from 2009 they will be hardly live.
But that is sure bitcoin will make a boom and we will be surprised to see it's value in the near future.
Hello buddy!
Interesting topic... Well BTC will be here for long time yet I'm not sure what will happen through all that time. Crypto world changes everyday, actually every moment so we can't expect what might be the future of BTC or other tokens since it's a big world and not easy to understand after all.
Thanks for sharing!
I find it very interesting the fact that the other cryptocurrencies are not anchored or dependent on BTC in this case I think it will be beneficial especially in the future. On the other hand, it would be good to lower the costs of BTC mining in different countries because in weak economies mining affects the population that does not know anything about it.
That's such a refreshing topic @ga38jem
I did asked myself number of times what would happen if last BTC would be mined. And I've tried to imagine what would have happened. And all I could find were more questions.
If miners would not be rewarded for mined blocks - then who would mine it?
To be honest, I don't even think it will be profitable for miners to mine even before we will reach that point of time. Even months before - it will be probably not rewarding enough to be profitable. The only way it could still be profitable is by reaching some insane price levels for BTC (So even super small fraction of minted bitcoin could cover costs of electricity).
I kindly disagree. Those institutions will very unlikely take on their own shoulders building/replacing infrastructure of miners.
I can easily imagine that regulations would not allow them to be involved in any shape or form.
Post resteemed and upvoted
Cheers, Piotr
Yes you might be right! The institutions could just build their own infrastructure. In the long term that would benefit them more.
Hi, a very well articulated post made, looking at BTC in near future with halving taking place this will increase demand and create scarcity, provided users still hold BTC i don't think there is much to worry about.
This is very interesting! Let's support each other to grow faster