- Bitcoin mining facts
- Why will the number of 21 million bitcoins never be reached?
- When will the last bitcoin be mined?
- What will happen after all bitcoins are mined?
19,276,325 bitcoins had already been mined as of January 29. With the upper limit of 21 million coins, there were only 1,723,675 left to be mined. What will happen with the crypto industry in general and miners in particular after the last bitcoin is mined?
Bitcoin mining facts
Bitcoin (BTC) is characterized by having limited supply. This characteristic was embodied into its design by the creator Satoshi Nakamoto. Over time, the currency becomes more and more scarce, which drives the demand and increases the currency’s price.
New bitcoins are mined once in around ten minutes. This is how long it takes on average for a new block to be created in blockchain.
As envisioned by Nakamoto, the number of bitcoins per block decreases by 50% after every 210 thousand blocks, or every four years. The maximum number of bitcoins that can be mined is 21 million.
Most likely, the real number will not reach this target because the Bitcoin codebase uses rounding operators. When the number of mined coins approaches its limit, no bitcoins will be generated anymore.
Why will the number of 21 million bitcoins never be reached?
It is believed that the actual number of bitcoins will not reach the known limit of 21 million. The reason is that the Bitcoin network uses bit-shift arithmetic operators. They round decimal points down to the closest smallest integer.
This happens when the reward for a new block is divided in two, and the amount of the new reward is calculated, which is usually expressed in satoshis.
Given that a satoshi, equal to 0.00000001 BTC, is the smallest unit of measurement in the Bitcoin world, it simply cannot be divided in two. When the blockchain needs to calculate the new reward amount by dividing satoshis, it rounds the amount down to the nearest whole integer with the help of bit-shift operators. This explains why the number of coins minted is expected not to reach the known limit.
When will the last bitcoin be mined?
It has already been mentioned that the number of bitcoins per block is divided in two every four years. Therefore, the last bitcoin, or to be more precise, the last satoshi is unlikely to be generated until 2140. Since the beginning of minting, the number of new bitcoins per block has decreased from 50 to 6.25 (the last such change happened in May 2020). In 2024, this number is expected to reduce once again and reach the value of 3.125.
Moreover, the number of coins in circulation is not equal to the total number of coins. It is lower. Bitcoin investors sometimes lose access to their coins, for example by forgetting their private keys, or die without sharing information about their wallets. According to a study conducted by the analytics company Chainalysis in June 2020, almost 20% of the bitcoins already minted may have been irretrievably lost.
What will happen after all bitcoins are mined?
When the actual upper limit, that can be less than 21 million, is reached, no new coins will be minted. Transactions will still be pooled into blocks and processed, and miners will only receive transaction processing fees. The destiny of bitcoin will depend on its popularity and relevance in 2140.
If by that time it becomes mostly a store of value, and is not used for everyday purchases, miners will still be able to profit, despite the low transaction volumes and no block rewards. The transaction fees will increase.
If the first cryptocurrency becomes a popular means of payment, miners will be able to profit from transaction volumes. As of 2020, 60% of coins were used for investment.
As the BTC price fell in 2022, the percentage of people willing to invest in the world’s first and most famous cryptocurrency decreased. However, despite the crisis, the demand has grown, largely due to the political environment. So far, the forecasts are optimistic, especially since some countries have become more active in promoting crypto regulation.
