Like gold and precious gems, Bitcoin is a scarce cryptocurrency with only 21 million coins. Satoshi Nakamoto, Bitcoin’s mysterious creator, set a limit on how many bitcoins can exist to keep them valuable. Experts estimate that by around 2140, all these coins will be mined and no more will ever be issued.
Say the last Bitcoin is finally mined in 2140. What happens next?
In this article, we talk about the implications to miners, traders, and investors when all bitcoins are mined.
How Do New Bitcoins Created?
“Mining” is the act of producing Bitcoins or a digital currency and adding it to circulation. In this process, high-powered computers “compete” to solve a complex cryptographic puzzle. The first miner who solves the puzzle adds a new block to the blockchain and receives rewards. It’s estimated that every 10 minutes, a new block is added.
For every 210,000 blocks added (which takes around 4 years), the reward for successful mining is cut by 50%. This process is called “halving” which aims to slow down the rate new coins are added into circulation, and ultimately delaying the time Bitcoin’s upper limit is reached.
When Bitcoin was created in 2009, successful miners received 50 Bitcoins. Due to the “halving” process, miners’ rewards eventually went down to 3.125 BTC in April 2024. The next halving will happen in 2028 and the reward will further decrease to 1.5625 BTC.
With the continuous mining of Bitcoins, the block reward will soon drop to zero as the 21 million supply limit is reached. At this point, no more BTC will be issued to the public.
How Many Bitcoins Are Left to Mine?
As of December 2024, the total Bitcoin in existence is 19,995,856.25, which is about 95.22% of the 21-million limit. This means that around 1,004,143.75 Bitcoins are left to mine.
Due to the “halving” process, it will take at least 115 years before all Bitcoins are mined.
What Will Happen When All Bitcoins Are Mined?
Here is a rundown of all possible outcomes once Bitcoin supply hits the 21-million cap:
No New Bitcoin Will Be Minted
Only the Bitcoin network, created by Satoshi Nakamoto, can create Bitcoin. And since the creator added the 21-million cap into the network’s protocol, it will be impossible to mint any new Bitcoin once the limit is reached.
Newly minted Bitcoins serve as miners’ reward for new blocks they add. Hence, when the limit is reached, Bitcoin will no longer be a miner’s incentive to validate and add blocks to the cryptocurrency’s chain structure.
Block Transaction Fees Will Be Miner’s Primary Incentive
Many experts argue that Bitcoin transactions will remain pooled into blocks in the future. Hence, Bitcoin miners will still get rewards from transaction fees when all Bitcoins are mined.
If more people will use Bitcoin as a store of value and medium of exchange, its transaction demand will increase. This leads to higher transaction fees that will keep mining profitable. Moreover, unlike block subsidies, block transaction fees are not cut in half every four years, so it is expected that miners can still earn profits via fees even without the issuance of new Bitcoins.
In short, without any block rewards waiting for successful miners, transaction fees will be the miner’s primary incentive. This is also Satoshi Nakamoto’s expectation for the cryptocurrency as stated in Bitcoin’s whitepaper:
“Once a predetermined number of bitcoins becomes available in the circulation, transaction fees alone could sustain network incentives.”
Bitcoin Might Appreciate Further
Basic economic theory tells us that an increased demand for a fixed supply resource will increase the resource’s value. So, if future markets adopt Bitcoin more widely as a medium of exchange, its value may appreciate due to its fixed supply. And since an appreciating asset has a deflationary nature, investors will see Bitcoin as a favorable hedge against inflation.
Furthermore, it is actually estimated that about 20% of Bitcoins may be lost due to forgotten private keys or inaccessible wallets. Thus, the effective maximum Bitcoin supply could be lower than 21 million. So, the cryptocurrency’s supply is scarcer than expected. Hence, we might expect a substantial level of appreciation of its value in the future.
However, Bitcoin’s value is not completely tied to its scarcity. It is a highly volatile asset affected by various economic and non-economic factors. Hence, even when all Bitcoins are mined, extreme price gains or falls might still happen.
Security Threats Might Emerge
When a miner solves a cryptographic problem, the solution is shared across the network. Afterward, the other miners or nodes will verify if the solution is accurate and meets the protocol rules. This process ensures that only valid solutions are added to the chain structure and no fraudulent activities happen.
But when all Bitcoins are mined and the network stops incentivizing miners with new Bitcoins, some miners may exit the network. If transaction fees appear non-profitable, mining activities might decrease. This will eventually pose serious threats to the Bitcoin network’s security as fewer miners will verify blockchain solutions.
There Might Be a Change in Bitcoin’s Capped Supply
This speculation is highly unlikely because Satoshi Nakamoto hardcoded the 21 million-cap to the Bitcoin protocol. Yet, some experts speculate that if Bitcoin’s economic role in the future becomes more substantial, such as if many countries adopt it as a reserve currency, there might be a modification in its initial limit after all coins are mined.
Wrap-Up: The Future of Bitcoin
We are still a century away from the time when all Bitcoins are mined. So, our outlook for Bitcoin’s future once it reaches the 21 million cap is purely speculative. Yet, we are certain that no Bitcoin will be issued after this point and transaction fees will become the primary incentive to engage in Bitcoin mining.
Overall, Bitcoin’s scarce supply will impact its value in the future and Bitcoin traders and investors must be prepared to face potential changes in its economic role in the future.
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