4 January 2021
If you've found yourself asking questions like, "how many bitcoins are there?" or "when will bitcoin run out?" or "what happens when all the bitcoins are mined?"— this is the guide for you! With around 18.5 million bitcoin having already been mined, we are nearing the limit of the 21 million cap. But what actually happens when we have mined all of the bitcoin? Let us find out.
First off, a quick refresher on bitcoin mining: much like gold, bitcoin cannot arbitrarily be created and needs to be “extracted”. While gold is extracted from mines, bitcoin is extracted through computational means. It is estimated that a block is added to the bitcoin blockchain every 10 minutes, and this will continue to happen until we reach the bitcoin limit of 21 million. It is important to note that every year, we produce 50% fewer bitcoins than we did the year before. This is due to something called bitcoin halving; when the rewards for mining a block are cut by half in order to slow down production. While the first 18.5 million bitcoin were mined in 11 years, is estimated that we need around 120 years to mine the remainder.
Back to what happens when we “run out” of bitcoin to mine! Here is what to expect:
The Effect on Bitcoin Miners:
Without any incentive for mining, some think that miners would no longer be driven to support the network and may abandon their work. This would compromise bitcoin’s decentralized nature since miners adding blocks to the chain is what keeps it decentralized. However, the truth is that while miners would no longer be earning any bitcoin as a reward, validating transactions still carries a small fee. This fee can be earned even after the last bitcoin has been produced. Moreover, this fee (which now stands at hundreds of dollars) could potentially grow immensely as the price of bitcoin rises.Additionally, rapid advancement in mining technology suggests that mining could become easier over the next few years. This would lower the cost of mining and increase profitability — even for small scale miners.
With there likely being over one million bitcoin miners across the globe, it is imperative to understand how they will be affected once the last bitcoin is mined.
The Effect on Bitcoin Owners:
Bitcoin’s price is expected to rise as we approach its cap. This is based on the economic principle of scarcity; as an asset becomes more rare, it becomes more valuable. Bitcoin has seen a huge rise in pricing over the past six months and is expected to continue to do so as it gains utility in the world. This level of utility is only expected to increase as more and more businesses and institutions adopt cryptocurrency which translates into a very valuable and scarce asset.As bitcoin's supply is exhausted, the demand for it is bound to increase. This ought to lead to a spike in its price.
How Many Bitcoins are Still There
Currently, it is estimated that the last bitcoin will not be mined before the year 2140 — when the last bitcoin halving is expected to occur. In the time before that, miners will spend years receiving rewards that are a tiny portion of the final bitcoin. With more than a hundred years to go, it is likely that the cryptocurrency community and bitcoin developers will have clearer answers to the questions regarding what will happen after all the bitcoin has been mined.
At the time of publishing, there were around 8,622,475 bitcoins in existence, but that number changes about every ten minutes as new blocks are mined.
Another category of bitcoin to keep in mind are those that are lost! It is estimated that around four million bitcoins are lost forever, though that exact number is impossible to uncover since bitcoins “lost” will still appear on the blockchain. The estimation of four million comes from the number of bitcoin sitting in wallets, unmoved. These ‘lost’ bitcoin are the result of people purchasing them and forgetting their addresses or keys, or even people passing away without giving out their information to anyone.