We all know that Bitcoin Supply Hard Cap (i.e the maximum number of bitcoins that can exist) is 21 million bitcoins.
We also know that Bitcoins are mined by miners who also confirm BTC transactions and that one day, all Bitcoins would have been mined.
The only question now is; Will that be the death of Bitcoin?
Well, this is not the only question.
We have decided to answer 5 of the most important question of what will happen after all the 21 million Bitcoins have been mined.
Bitcoin supply hard cap? Here we are only referring to the maximum bitcoins available, EVER.
Bitcoin mining as of today is one of the most common crypto terminologies around.
But have you ever wondered what the future holds for bitcoin mining and miners?
To be able to even start to imagine the future, we need to do a rundown of what we do know about Bitcoin mining, Bitcoin supply, and the Bitcoin hard cap.
Bitcoin Supply Hard Cap: What We Do Know
Presently, we do know that;
- Bitcoin mining is the process by which transactions are been confirmed and added to the blockchain. It is also responsible for creating new bitcoin through the miner’s block reward.
- Bitcoin supply is finite and mathematically limited to 21 million bitcoins, EVER.
- As of today, over 80% of this figure approximately 16.5 million bitcoins have been mined and already in circulation.
- The very last bitcoin is predicted to be mined sometime in the year 2140 [over a century from our present time].
Now that we have a list of what we do know, ever wondered what would happen when all 21 million bitcoins have been mined?
What will this mean for bitcoin price?
Will mining stop when bitcoin reaches its hard cap?
What would then be the reward for mining and miners?
What effect would this have on Bitcoin blockchain transaction fees?
What would this mean for the everyday user?
These are some questions that frequently go unanswered in the Bitcoin community.
In this piece, we are going to be giving probable answers to these questions using what we know as a basis.
Frequently Unanswered Questions About When All Bitcoins Have Been Mined
Question 1: What would this mean for bitcoin price?
To get this right, imagine this.
A very famous and well-known producer of the best brand of rice stops its lifetime production at 100 million bags. This leaves the rising number of consumers of its brand of rice scrambling for a portion of the already circulating bags.
This would cause massive aggressive buying on the part of consumers and cause sellers to up their asking prices. This would ultimately and inevitably cause a rise in the price per bag of rice.
In Bitcoin’s case, this aggressive buying coupled with the perceived futuristic value and massive adoption of Bitcoin is indeed an added advantage.
These factors would predictably cause a huge spike in the price of bitcoin around this period of time.
Question 2: Would bitcoin mining stop?
Here, we already know about bitcoin mining. So, I would say this would be impossible.
Why? Apart from creating new bitcoins into the system, bitcoin mining is also responsible for confirming and adding transactions to the Bitcoin blockchain.
So, you see; this implies that, as long as bitcoin is still in use, bitcoin mining cannot be stopped. Though by that time, we should have witnessed a very high advancement in mining technology.
Question 3: What then would be the rewards for mining?
If there would be no more block rewards, what then would be the reward for mining or miners?
Here, we should be aware that apart from the block reward, miners also charge a very small fee for every bitcoin transaction confirmed and added to the blockchain.
These are called bitcoin blockchain transaction fees. Though very little, these fees form a portion of the overall miners’ reward.
So, when the standard block reward stops, the miners would have to make do with transaction fees as the only form of mining reward.
But would these meagre fees be enough for a miner to breakeven not to talk of sustaining and keeping them in business?
This would still be bad news for Bitcoin users as it inevitably would cause a spike in Bitcoin transaction fees.
Another question that might be asked is if the bitcoin ‘Lightning Network’ which makes ‘Zero transaction fee’ possible is implemented, what will be the reward for miners?
Question 4: What would be the impact on bitcoin transaction fees?
Considering machinery, electricity, maintenance, cooling and other overhead cost incurred by miners in the mining process, these little transaction fees would not be profitable to miners.
Putting these costs into consideration, transaction fees would predictably have to rise to about $20 per transaction to be able to sustain and keep miners in business.
Also, considering the option of switching some of their mining power to other ASIC compliant coins, Bitcoin transaction fees would still be predicted to hover between $7 – $10 per transaction depending on the profitability of the other coin been mined.
There have been arguments for and against these figures, saying it could go against Bitcoin’s core features.
In any of these scenarios, these figures may become a problem of affordability to an everyday Bitcoin user except a means is devised to avoid the rise of these transaction fees.
Like I said above, we might experience a technological advancement that might make it possible for mining to cost much less or even make it possible to mine BTC through a mobile device.
Question 5: What would this mean to the everyday user and the bitcoin community?
When it comes to the user and the community at large, considering the amount to be paid in processing fee per transaction, there may be a shift.
This might involve prioritizing bitcoin as a store of value other than a currency which it is and adopting currencies with lesser fees for their everyday transactions.
This could mean that users diversify to adopt new more efficient currencies or still stick with Bitcoin considering its value and mass adoption.
Anyway the pendulum swings, this aspect may prove to be a bit difficult to predict given the highly unpredictable nature of users.
Predicting the future in say, four to five years from now may seem interesting.
However, predicting the outcome of an event over a century away might be a bit tricky.
In any way, I have discovered from experience that whatever the future holds, it is always an interesting and intriguing journey with Bitcoin and cryptocurrencies in general.
But factoring the fast pace of technological advancement, mass adoption and emergence of more efficient cryptocurrencies, only time would tell.
What do you think about Bitcoin’s supply hard cap?
What do you think of our predictions?
Do you have any contradictions, additions, or further questions?
Share your thoughts. We would like to hear from you.