BitcoinMining

What will happen to Bitcoin after all 21 Million coins are mined

By August 9, 2018 No Comments

Bitcoin shows some similarities to gold as an asset. Neither bitcoin nor gold can be created arbitrarily. Gold has to be mined from the ground and Bitcoin via digital means. The founders of Bitcoin clearly articulated that Bitcoin, like gold, must have a limited and finite supply. Bitcoin has a mineable supply of 21 million coins. Once these many coins have been mined, the total supply will be tapped out unless Bitcoin’s protocol is altered to allow for an increased supply. Bitcoin enthusiasts argue that, like gold, the fixed supply of the currency allows for banks to be kept in check and prohibited from arbitrarily issuing fiduciary media. The question, however, remains – What will happen when the global supply of Bitcoin is tapped out?
Effects on Bitcoin Miners
The group most directly impacted by the supply limit of Bitcoin is definitely the Bitcoin mining community. On one side, you have the skeptics of the limitation of Bitcoin who argue that miners will be forced away from the block rewards they receive for their efforts once the Bitcoin supply in circulation has reached its limit. This will make the mining community begin to depend on transaction feeds to maintain their operations. Bitcoin.com argues that miners will find the cost of this process unsustainable and that this will lead to a decrease in the number of miners, a process of centralisation of the Bitcoin network and many negative effects on the ecosystem.
In this debate, there is an assumption made that transaction fees on its own will not be sufficient to keep Bitcoin miners financially solvent after the mining process has been completed. However, there is also reason to believe that transaction fees and mining costs will even out somewhere down the road. Looking far ahead in time, it is not impossible to imagine that mining chips will become much smaller and highly efficient. This would decrease the burden placed on miners and would decrease the threshold of an initial cost required to become a miner. Further, we could see an increase in transaction fees and this could help keep miners afloat.
Price of Bitcoin
Bitcoin’s price has risen exponentially from its starting point and has lost much of its value from its peak level. It has been a rollercoaster ride that you simply don’t want to get off of.
Nobody has complete clarity about how Bitcoin will continue to manifest itself onto the larger financial world but it seems plausible that its limited supply will be a leading factor in driving the price back up. There are large piles of inactive coins that are stored across the world, the largest of which belongs to the individual or group that created Bitcoin, the enigmatic Satoshi Nakamoto. It is possible that this supply of about one million coins is being saved for a time when the global supply is faced with increased levels of demand.

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