- By Pierre-Alexandre
March 28th, 2019
What will happen after mining 21 million BTCs?
Satoshi Nakamoto, the creator of Bitcoin, designed it in such a way that there could never be more than 21 million coins. This will ensure that Bitcoin will retain its value in the long-term since the number of coins will be finite.
By 2140, the last Bitcoin would have been mined, and no single bitcoin would be created afterward even if there is a high demand for them. If it is to follow the law of demand and supply, the price of the cryptocurrency could rise significantly once it has attained a fixed amount.
A look at the history of Bitcoin indicates that an increase in price is most likely following a halving event which takes place every four years. Mining becomes less profitable following each halving while investor interest rises and the BTC price also increases. This intensifies the theory that the BTC price could continue to grow as supply reduce and more halving events take place. Other factors could also play a role in determining the BTC price such as regulations. If the crypto sector is to receive favorable rules all over the globe, then this could widen Bitcoin’s acceptance and increase the price and value of the leading cryptocurrency. However, adverse controls could harm the crypto space and could see the BTC price dwindle over the coming years.
Once the last Bitcoin has been mined, miners will stop getting rewards from blocks, but instead, make earnings for securing the network and approving transactions. There are some who believe that receiving transaction fees would not be sustainable for miners once they stop getting block rewards. Some miners would turn to transaction fees earlier as mining gets harder due to block difficulty and the high cost of electricity and mining equipment. There are suggestions to increase transaction fees to ensure that miners continue tending to the Bitcoin network even when the last block has been mined.
Why some ask to raise the BTC limit
Some proponents within the crypto sector believe that the total number of BTC should be increased beyond the 21 million limit set by Satoshi. Peter Todd, a famous Bitcoin core developer recently suggested to the community that the 21 million limit should be removed:
In my @WhatBitcoinDid interview I mentioned how Bitcoin should have had a 0.1% or 1% monetary inflation tax to pay for security.— Peter Todd (@peterktodd) March 22, 2019
Something I didn't mention - and should have - is I think the 21 million BTC limit is so fundamental it's more likely Bitcoin will die than change it.
The developer believes that the cryptocurrency should have a monetary inflation tax (block reward) to enable it to pay for the network security. While some crypto enthusiasts suggest that people would fork away from Bitcoin if it has inflation tax, Todd pointed out that it already has 4 percent inflation tax and no one is forking away.
The concern amongst some developers such as Todd is that once the last BTC has been mined and miners stop receiving block rewards, then they would not be necessarily motivated to secure the blockchain and approve transactions.
At the moment, several variables affect the Bitcoin ecosystem. The Bitcoin users and investors do not want taxes and high inflation while miners wish to ensure that their mining efforts stay profitable.
Some interesting tweets about the 21 million supply limit:
https://t.co/SybbiuPNh2— Rothbard's Disciple (@NationalAnarchy) March 27, 2019
I don't understand the 2 points where it says removing the 21 million Bitcoin limit will make Bitcoin not a currency, and not digital gold. Gold mining didn't stop after 140 years and there's never been a currency with 0% inflation. Is everyone retarded?
I don't think it should have, Peter.— AwyeeBitcoin (@DeaterBob) March 22, 2019
If not for the fixed supply pitch bitcoin's bootstrap would have been much slower and bitcoin might not have won the race for establishing dominate network effect.
But I do agree with the latter....
If Bitcoin's price stays roughly where it's at (which I think is more of a possibilty that most of community is willing to admit), then this will be a problem after the next, next halving.— Ben DiFrancesco (@BenDiFrancesco) March 22, 2019
Predictable and reliable Bitcoin inflation schedule is one of its greatest features. And the main distinction from any fiat or shitcoin. Bitcoin can not earn status of hardest money without it.— Veseli ⚡️ (@Veseli_Btc) March 22, 2019
1/2 Won't the finite amount of bitcoins be a limitation?— ŁitecoinFam $POLY $RVN $LTC $ZRX $BAT $XLM (@LitecoinFam) February 18, 2019
Bitcoin is unique in that only 21 million bitcoins will ever be created. However, this will never be a limitation because transactions can be denominated in smaller sub-units of a bitcoin, such as bits -
Bitcoin's value proposition is as a sound, un-inflatable money. A 21 million coin limit. Without that, it's worthless.— vake (@vakeraj) March 18, 2019
I would add: 21 million Bitcoin is not a law of the universe - only if YOU run a full node and reject blocks that breach this limit makes it law.— Irek Zielinski (@irek_zie) February 22, 2019
Always amusing to hear people talk about Bitcoin's 21-million supply limit like it's written in stone. Well, it's not. It's written in code, and code can be changed. https://t.co/81R2ZzGmdA— Amy Castor (@ahcastor) February 9, 2019
Bitcoin news and social sentiment for Q1 2019: Our analytics show that news sentiment for Bitcoin is now oscillating in a positive range, while social sentiment is still oscillating between the negative and neutral zone.