The total number of Bitcoins that will ever exist is capped at 21 million by design. This decision was made by Satoshi Nakamoto to ensure that the cryptocurrency maintained a deflationary nature. Each 4 years, or 210,000 blocks, the network undergoes a halving where block rewards for miners are reduced resulting in fewer Bitcoins entering circulation. So what will happen after the last Bitcoin is mined?
Understanding The Monetary Policy Behind Bitcoin
Unlike fiat currencies, which are controlled and printed by a government’s treasury department, Bitcoin has a dynamically opposite approach where the supply of new coins in the market is ever decreasing.
Bitcoin mining involves the process of verifying transactions by solving complex mathematical puzzles (requiring heavy-duty computing infrastructure) and in turn minting new coins. Each time a new block is added to the blockchain, new Bitcoins enter circulation through payments received by the miners.
In order to keep the currency deflationary, Satoshi Nakamoto designed the halving mechanism, which controls the number of new coins entering circulation. In May 2020 Bitcoin underwent its third halving reducing the number of BTC per block reward from 12.5 BTC to 6.25 BTC. Below shows the previous halvings as well as what percentage of coins had been mined at that particular halving.
|Mined Since Last Halving
|% BTC Mined
|3 January 2009
|28 November 2012
|9 July 2016
|11 May 2020
When Will The Last Bitcoin Be Mined?
Based on the original design of Bitcoin, we know that the halvings take place every 210,000 blocks. If we use this information we can put together an estimate of when the next halvings will take place, and through the percentage of mined BTC at that time we can establish when the last BTC will be mined. Spoiler alert: it’s not going to be in our lifetime.
|Mined Since Last Halving
|% BTC Mined
Based on the information above, in 2032, 99.21875 BTC will be mined with a block reward of 0.78125. It is believed that it will take many more years to mine the very last of the 21 million BTC, putting estimations at 2140.
Why The 21 Million Figure?
There are many theories out there however we will touch on the one that seems most likely. When Satoshi Nakamoto was creating Bitcoin, the global M1 money supply at the time stood at approximately $21 trillion (this refers to all money in circulation around the entire world). With 100 cents in a dollar, that number came to 2,100 trillion “pieces” of money.
Satoshis are the smallest units of Bitcoin accounting for 100th million of the coin. If Bitcoin was to become a universal currency as Nakamoto intended, the 2,100 trillion pieces of money would equate to 2,100 trillion satoshis, or 21 million Bitcoin.
“I wanted to pick something that would make prices similar to existing currencies, but without knowing the future, that’s very hard. I ended up picking something in the middle. If Bitcoin remains a small niche, it’ll be worth less per unit than existing currencies. If you imagine it being used for some fraction of world commerce, then there’s only going to be 21 million coins for the whole world, so it would be worth much more per unit.” – Satoshi Nakamoto, from email correspondence with Bitcoin developer (and former senior software engineer at Google), Mike Hearn.
When All The Digital Gold Is Mined
So, what will happen after the last Bitcoin is mined? When the supply of new coins into the system comes to an end the miners will still have an incentive to keep carrying on their operations as the fee they receive for processing transactions is expected to grow in line with the price of Bitcoin. The Bitcoin whitepaper states:
“Once a predetermined number of coins have entered circulation, the incentive can transition entirely to transaction fees and be completely inflation free.“
Miners are central to the efficient operation of a blockchain-based cryptocurrency. After all the Bitcoins are mined, miners will still need the support of users in the form of a transaction fee to sustain operations. However, some miners may exit the Bitcoin ecosystem as they may not be able to sustain the costs of operations.
Why You Should Invest In Bitcoin Today
Bitcoin will continue to exist even after the last coin is mined, however even that is still far, far away. In the meanwhile, in the last decade since it came into existence, the cryptocurrency has emerged as the preferred and penultimate digital currency all over the world. The supply of this asset is limited, it is not inflationary in nature and offers a valuable alternative investment for many, especially people who suffer from political uncertainty.
The easiest way to acquire Bitcoin is through Oobit, all you need is a debit or credit card and five minutes of your time to go through one of the easiest KYC procedures that exists in the industry. There is really no need to wait or wonder about what will happen after the last Bitcoin is mined when you can get your Bitcoin today in just a few clicks.
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