"Mining won't die for years to come." What will happen after all bitcoins are mined

The supply of the first cryptocurrency is limited to 21 million coins. Why miners won’t shut down equipment after mining them and when to expect a supercycle of growth of the main digital asset

"Mining won't die for years to come." What will happen after all bitcoins are mined

At the beginning of October 2021, miners mined almost 90% of the entire bitcoin issue (18.8 million out of 21 million BTC). The first cryptocurrency has been mined since its creation in 2009. RBC-Crypto experts explained when the last bitcoin will be mined and how it could affect the entire industry.

The Future of Mining

The end of bitcoin mining will not happen soon, according to EMCD CEO and founder Michael Jerlis. According to him, the last coins in the bitcoin network will be mined in 2140. The expert explained that the first cryptocurrency mining will not die for many years after all bitcoins are mined, as the complexity of the network will grow in proportion to the number of miners. For this purpose, the bitcoin blockchain has a complexity recalculation mechanism, which is activated every two weeks, the expert noted. He also reminded about halving, which in the history of the first cryptocurrency was already three.

The complexity of the network determines the amount of computing power required to find a new block in the bitcoin blockchain. This parameter changes every 2016 blocks, or about once every two weeks. This is necessary to maintain a block finding time of about 10 minutes.

Halving is the halving of the reward for a mined block, which occurs every four years. Initially miners received 50 bitcoins, this was reduced to 25 coins in 2012 and 12.5 coins in 2016. On May 11, 2020, it dropped to 6.25 bitcoins. Halving occurs every 210,000 blocks mined. The next halving is expected to take place in 2024.

As the network grows and the number of transactions grows, the fees for those transactions increase, Jerlis recalled. He explained that the commission per block mined is already between 0.25 and 3 bitcoins (depending on the blockchain load).

“After mining the last block as a reward for their work, miners will receive these commissions, so mining will not be able to stop being profitable for miners”, the expert explained.

In the future, the amount of commissions in the bitcoin network will grow, Jerlis predicted, if the cryptocurrency is used everywhere for transnational payments, and the remuneration per block will gradually come to naught.

“The creator of the first cryptocurrency, Satoshi Nakomoto, envisioned exactly this model of bitcoin development”, the expert recalled.

Mikhail Karkhalev, a financial analyst at the cryptocurrency exchange Currency.com, agreed with the fact that mining would not become unprofitable. He suggested that in the future, miners will start charging extra fees for speeding up transactions or there will be some ways to re-mine bitcoins that have already been lost.

The economic model of bitcoin takes into account a situation where all coins are mined, explained ENCRY Foundation co-founder Roman Nekrasov. He argues that miners will not work at a disadvantage, because without them it is impossible to operate the network and conduct transactions. Nekrasov believes that once all bitcoins are mined, there will be an increase in transaction fees.

“The calculation will be done by market mechanisms – how much the sender is willing to pay and how much the miner is willing to include this transaction in the block, this is between these two figures”, the co-founder of ENCRY Foundation summarized.

Super Cycle of Growth

When the reward to miners for a mined block becomes less than one bitcoin, there may be a supercycle of growth in its price, said director of the service for the exchange of cryptocurrencies Alfacash Nikita Soshnikov. In his opinion, such a decrease in the reward per block will trigger a rise in bitcoin prices to $1 million. This could happen as early as in the next decade, Soshnikov said.

“It will hardly be more than 10 years before the cherished $1 million mark, so it will be reasonable to invest in the asset now”, the expert added.

According to Nekrasov’s forecast, already by 2050 the value of the first cryptocurrency will exceed $1 million, as countries will see all the benefits from the introduction of bitcoin in their economies.

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