news hardware Bitcoin: what will happen after the last mined BTC?
Like gold, the amount of Bitcoin is limited. This is equivalent to 21 million digital currencies (BTC). When the miners have extracted the last Bitcoins from the network, what will happen to the cryptocurrency?
- 21 million Bitcoin and not one more
- Bitcoin mining is intensifying as it goes
- Increasingly scarce bitcoin rewards
- The last bitcoin will be mined in over 100 years
- Possible scenarios after mining the last Bitcoin
21 million Bitcoin and not one more
Almost 14 years ago, Satoshi Nakamoto explained all the technical details of his project in the whitepaper (a complete report). In it, the anonymous creator of Bitcoin indicated, among other things, the limited number of Bitcoin and its importance.
To create a real digital currency, Satoshi had to build on different fundamentals of the classical monetary system, including scarcity. In that sense, the Bitcoin code was initially scheduled to issue 21 million coins and not one more.
This aspect makes Bitcoin particularly desirable in the eyes of investors. In fact, Bitcoin goes even further than gold by limiting its supply, since everyone knows the final number of coins, even if they haven’t been mined yet. Conversely, if an unknown gold mine is discovered, it will inexorably increase the total supply of gold on Earth.
In addition to the limited quantity, the further we go in time, the rarer these pieces become…
Bitcoin mining is intensifying as it goes
To generate Bitcoins, the network is mainly based on the remuneration of miners. When an individual uses the computing power of their hardware (graphics cards, ASICs, etc.) to validate transactions, they actively participate in the operation of the network.
By validating block transactions, miners are rewarded with Bitcoin (BTC). This is called a proof-of-work (PoW) validation system. This is how miners regularly issue new Bitcoins into circulation.
Only, over time, the difficulty of mining on the Bitcoin blockchain intensifies. This increasing difficulty of the algorithm generates significant costs in the electricity used and in the choice of the equipment to be mined (graphics cards, processor, ASIC, etc.). As a result, most miners develop their infrastructure in such a way that they can sustainably mine Bitcoin.
Increasingly scarce bitcoin rewards
This drop in profitability has a name: the halving. Bitcoin has experienced 3 halvings since its creation in 2008, the last of which dates back to May 2020. Halving means halving in English, and as the name suggests, approximately every four years (210,000 blocks) – the protocol written in the bitcoin code the rewards given to miners are halved.
At the launch of the Bitcoin network, the mining profit per block was 50 bitcoins (which represents approximately 1 million euros at current prices). After the first halving in 2012, the reward increased to 25 bitcoins per block and so on…
The last bitcoin will be mined in over 100 years
Currently pegged at 6.25 bitcoins, the next halving is estimated to take place in March 2024, bringing the amount of BTC issued per block to 3,125. With this decline in growing profitability, the last few bitcoins will be the ones to be desired…
Thus, while 19.2 million Bitcoins have been mined in 11 years, the next ones will be increasingly difficult to generate. It is estimated that the last bitcoin will be mined around 2140 to reach the maximum milestone of 21 million coins.
Possible scenarios after mining the last Bitcoin
All Bitcoin users depend on mining. Bitcoin price and network usage are largely driven by miner interest. So what will happen if the earnings associated with this activity become zero?
Well, that won’t happen. In fact, mining will not end after the year 2140. Miners will continue to receive remuneration thanks to transaction fees validated on the network. That is why after the last bitcoin mined, it is very likely that most miners will continue to mine the network.
If Bitcoin continues to be adopted by various organizations, it would also be interesting to see the demand for a currency whose supply is completely depleted, unlike the euro or the dollar.
However, we are not there yet. At the moment, the network is only in its infancy. Because of this, it is possible that Bitcoin will undergo some major innovations or changes if the players in the network establish a consensus.
Also, in 100 years, there may be many negative events that could affect Bitcoin and its use. Among the conceivable intrigues, Bitcoin could be replaced by a cryptocurrency that is considered more efficient or, even worse, be banned in several countries. China has already tried by prohibiting the entry of minors to its territory, however this does not seem to have an effect.
All this without taking into account the many economic, political and social events of the next 120 years. So see you in 120 years to see the result…
What is Bitcoin?
Bitcoin is first and foremost a payment network that allows its users to exchange currency between peers. It is based on a digital currency called Bitcoin (BTC).
Thanks to blockchain* technology, Bitcoin offers the possibility of making decentralized payments, that is, without third parties or trusted authorities. With this in mind, Bitcoin was initially created to be an alternative system to banks.
What is the blockchain?
The blockchain (literally chain of blocks) is in a way the digitization of trust. Specifically, its code allows web users to exchange value between peers with a decentralized validation system. All actions performed on a blockchain are anonymous but transparent.
The mathematician Jean-Paul Delahaye explains that we can visualize this great archive as “a very large notebook, which everyone can read freely and freely, in which everyone can write, but which is impossible to erase and indestructible”.
Who handles Bitcoin?
If the name behind Bitcoin is known to everyone, Satoshi Nakamoto, no one really knows the identity of the creator. Either way, it doesn’t matter since Satoshi has little power over his code.
In fact, Bitcoin is decentralized, so it does not depend on any entity. Its network does not belong to anyone since it is the consensus of its users that allows the change of its protocol. Developers can make changes only if miners and network nodes agree with the choice.
How does Bitcoin work?
The Bitcoin network works thanks to its users. To carry out user transactions, Bitcoin has operated its blockchain. Specifically, each miner puts their machines (graphics card, ASICs) in competition to solve an equation in order to validate the veracity of the block. Therefore, the Bitcoin network makes sure to issue secure transactions vetted by various binary brokers.
How to get bitcoins?
Anyone who uses your hardware computing power (graphics card, ASIC) gets paid in BTC according to their participation in the network.
In addition to mining, Bitcoin can be obtained on cryptocurrency exchange platforms against fiduciary currency among others (euros, dollars, etc.).
Where to store bitcoins?
Just like cash, Bitcoin can be stored in virtual wallets, usually called wallets. There are several types of wallet:
Hot wallets are Internet-connected private key storage solutions. In software form, these wallets can be apps, extensions, or even websites.
Cold wallets are a safer alternative to cryptocurrencies. In fact, the private keys of these wallets are not stored online, making it much more difficult for a hacker to access them. These wallets often look like a USB stick or even paper.