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What will happen when bitcoin reaches 21 million?
What will happen when bitcoin reaches 21 million?
Bitcoin

What will happen when bitcoin reaches 21 million?

By Alfredo de Candia - 29 Dec 2019

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In 2140, when bitcoin reaches 21 million mined coins, what will happen when miners no longer receive rewards through mining? 

Satoshi Nakamoto predicted that there would be a finite number of BTC in order to prevent inflation: in the traditional monetary system, an infinite amount of money can be printed, but this can affect its depreciation and purchasing power for goods and services, as is happening for example in Venezuela.

To be precise, the exact number of maximum bitcoins is 20,999,999.9769 and is calculated from the initial block reward of 50 BTC.

Moving forward, through a mechanism called halving, every 210,000 blocks the reward is halved and every decimal digit is discarded after the eighth position, so after 210,000 blocks there have been generated 50 * 210,000 BTC, equal to 10,500,000 bitcoins.

After the next 210,000 blocks, 25 * 210,000 BTC were generated, equal to 5,250,000 bitcoins, which were added to the previous ones for a total of 10,500,000 + 5,250,000 = 15,750,000 bitcoins, and so on.

Clearly, it is legitimate to wonder whether or not this will lead to a loss of interest for miners due to the lack of incentives, but it is also true that there is another system of incentives for Bitcoin, which are the fees paid upon making a BTC transaction.

It is precisely the fees that will allow the ecosystem to survive since, once the last bitcoin is mined, these will increase in value or at least that is what should happen in the long term. Consequently, if we calculate a price per bitcoin unit between $100,000 and $1 million, the fee could be between 1,000 and 100,000 satoshis.

So, even if no more bitcoins will be mined, there is another solution to incentivise miners in order to make the blockchain secure and keep it up and running.

 

Alfredo de Candia
Alfredo de Candia

Android developer for over 8 years with a dozen of developed apps, Alfredo at age 21 has climbed Mount Fuji following the saying: "He who climbs Mount Fuji once in his life is a wise man, who climbs him twice is a Crazy". Among his app we find a Japanese database, a spam and virus database, the most complete database on Anime and Manga series birthdays and a shitcoin database. Sunday Miner, Alfredo has a passion for crypto and is a fan of EOS.

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