What Happens When All Bitcoins Are Mined - Energimine

What Happens When All Bitcoins Are Mined

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There is almost no one who hasn’t heard about cryptocurrencies and Bitcoin. Modern times have brought many new assets and possibilities, but who would have thought that virtual money would be something we use? As it becomes ever more popular, many people are buying into this cryptocurrency. But what happens when all Bitcoins are mined?

In this article, we will answer the questions: what is Bitcoin, how much of it is there left to mine, and what happens when it’s fully mined? So without further ado, let’s take a look at the answers to these questions and what this might mean for your portfolio if you are an investor.

What Is Bitcoin?

Bitcoin is virtual money that works the same as real-life money. You can think of it as a computer file that is stored in a digital wallet app that you can install on your phone or computer. Each wallet has an address that you can share to receive Bitcoin from your friends, business partners, customers, etc.

When it was first launched, many people were skeptical; but over the years, people became intrigued and impressed with the value of Bitcoin. Some even regretted not investing in Bitcoin in its first years. The price of Bitcoin has increased over the years, and this number is expected to go up. 

Bitcoin and blockchain were created to avoid the third parties in the transaction process, making a decentralized transaction process. The transaction is a process when Bitcoin values are transferred between accounts. All transactions are stored on the blockchain once confirmed.

Blockchain is made of blocks, and each block contains a collection of transactions. Transparency is one of the main values of this system since you can see new blocks and transactions in it. There is no space for cheating and corruption in this system.

This digital currency is a type of cryptocurrency which means that cryptography is used to keep it safe. Bitcoin is the first cryptocurrency, but new cryptos have appeared since then.

Why Is Mining Important?

Miners are people who solve cryptographic puzzles which validate and verify a block of transactions in the network. Miners are paid with new bitcoins as well as cumulative transaction fees paid in a block. In 2012, Halve was up to 25 Bitcoins per block, and that number kept going down. In 2016 it was 12.5, and in 2020, miners could make 6.25 Bitcoin for every new block.

Although the mining process seems easy, it’s actually very energy consuming, and it requires high-tier computational hardware to solve complex mathematical puzzles. Energy bills can get very high, so Bitcoin profits are the difference between Bitcoin value and the cost of resources needed to mine. 

What Happens When All Bitcoins Are Mined?

The maximum Bitcoin that can be mined is 21 million. This is information given in the original Bitcoin source code, which is programmed by Satoshi Nakamoto. He is the one who created Bitcoin and presented it to the world, but we still don’t know who exactly this man is. 

Current analysis shows that as the mining process continues, the value of Bitcoin mining becomes less profitable. That doesn’t mean that miners won’t be rewarded; it just means that they will be rewarded through transaction fees instead of Bitcoins.

Read More – Crypto guidelines

Since Bitcoin’s launch in 2009, 19 million coins have already been mined. Although this is about 90% of the total stock of Bitcoin, predictions are that the rest won’t be fully mined until 2140. That’s because the mining speed rate lowers in time. The first half of launched cryptocurrency was mined in 3 years, and less than half a million BTC was mined in 2021.

Every 10 minutes, a new Bitcoin is added to the supply at a fixed rate of one block, but half of the new bitcoins is reduced over four years. On the other hand, transaction fees will rise, compensating for the lack of mined Bitcoins. Since Bitcoin is designed for accuracy and not speed, if the number of transactions becomes bigger, it will slow down the transaction process.

shelves with equipment for bitcoin mining farm

In case the transaction number goes down, Bitcoin may become a reserve asset. That would push out the smaller traders from the network, leaving only large institutional players on the playground. This means that transaction fees would go up, making it too expensive for small retail traders to trade. 

If the demand for Bitcoin keeps growing, the price will grow too. This way, sellers will determine the price since they will have Bitcoin that becomes harder and slower to mine. 

In this calculation, we shouldn’t forget those Bitcoins that are permanently lost. This happens due to lost passwords for Bitcoin wallets, lost hard disks, or when someone dies and passwords are not left behind. 

There are two popular growth models to see anticipated cryptocurrency changes. Those are Parabolic Trav’s Parabolic growth model and the Stock to Flow price model. They are both predicting price, value, and fluctuations in the market which can help with investment decisions.

If hyper-bitcoinization occurs by 2140, $100 of BTC at today’s current price of $8880 would be 0.01126 in Satoshis. By the time the last Bitcoin is mined, Satoshis should have a projected value of $238,373.77.

What Exactly Does This Mean for Miners?

Once Bitcoin is completely mined, miners can still earn money with transaction fees. On the other hand, once there are no block rewards, there can be negative side effects.

First, miners from cartels can be a problem since they can control mining resources, hence determining higher transaction fees.

Also, selfish mining can occur, as people can hide new valid blocks. They can release them later as orphan blocks that are not confirmed in the Bitcoin network, resulting in increased block processing times. It also makes fees higher once new blocks are released in the blockchain. 

Whatever happens to the speed of Bitcoin mining, one thing is for sure: once Bitcoin is mined, it’s all over. However, there are still 2.1 million bitcoins to be released and mined until that time. 

Conclusion

It is not too late to invest in Bitcoin and trade with it at this stage. It may be a good idea to get paid in Bitcoin when possible since you can sell it later when it gains more value. To do that, you need to follow market fluctuations and stay informed on what is happening with this cryptocurrency. If you’re willing to do that, you can make a good profit. If not, you can still earn by selling Bitcoin.

Market predictions seem promising. Although Bitcoin is running dry from the network in terms of mining, it’s still profitable to invest in crypto and join the Bitcoin world. 

If you want to invest your capital, you might want to check out Insider at Capitalist Exploits. They also offer Insider Newsletter to inform you about macro trades. If you need an additional source of knowledge with legitimate information, you may like Capitalist Exploits

We hope this article was helpful and that it gave you a better understanding of Bitcoin fluctuations and what to expect in the future. Even though some people do not trust this system of financial exchange, it is totally legitimate and safe to use. Predictions seem to be that Bitcoin won’t see its end anytime soon, so why not dive in with our guidance? 

Also Read- Strategies of Cryptocurrency

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