When Bitcoin was originally invented it was essentially worth nothing, and it took two years for a single coin to reach the value of $1. At the time of writing a single Bitcoin is worth over $43,000.
Despite the success it's had, there's still a range of concerns around Bitcoin and cryptocurrencies in general. More bitcoins are coming into circulation every day which has a lot of people asking "what happens when all the Bitcoin is mined?"
This may not be something you need to worry about. Keep reading to find out why.
What Is Bitcoin?
Bitcoin is a digital asset created in 2009 and is the world's first cryptocurrency. There are no physical coins and the entire Bitcoin ecosystem works through blockchain technology.
Traditional currencies are typically run by financial institutions, whereas cryptocurrencies operate through decentralized ledgers, meaning no one (not even governments) can manipulate or control them in any way.
The creator of Bitcoin is someone known as Satoshi Nakamoto, but this is just an alias. The true identity of this person (or group of people) remains unknown.
Over the years people have made a lot of money with Bitcoin in a range of ways. Bitcoin trading and investing are among the most popular methods. These work in a way that is somewhat similar to the stock market.
Another way that people make money with Bitcoin is through Bitcoin mining.
What Is Bitcoin Mining?
Over the years people have made huge profits by mining Bitcoin. Miners provide computing power to help the blockchain run which is how new Bitcoins come into circulation.
Mining Bitcoin requires a lot of processing power, and as the years have gone by it has become more competitive. These days a standard computer can't keep up and won't be suitable for Bitcoin mining. People spend thousands setting up powerful mining rigs to mine Bitcoin so that they can generate huge profits.
The hardware solves complex equations to validate "blocks", and the first miner to successfully solve the block receives a reward in the form of Bitcoin. As standard computers aren't powerful enough to complete these blocks at any speed they aren't worth using to try to mine.
In recent years people have been investing in ASICs (application-specific integrated circuits) as they're incredibly powerful, and are specifically designed for crypto mining. An alternative option people go with is to set up their own crypto mining rig.
Mining has been going on for years, but as more is mined people are asking the question "will we run out of bitcoin?".
How Much Bitcoin Is There?
There is no way to change the Bitcoin source code, and it was originally made so that Bitcoin had a cap of 21 million coins.
At the end of March 2022, the 19 Millionth Bitcoin was mined, which means there are now less than 2 million left to be mined. After this, it will never be possible to create another Bitcoin.
Nakamoto solved the first-ever block and it yielded 50 Bitcoins. This was originally standard, but the source code makes it so that the yield per block halves every 4 years. After the first 4 years it dropped to 25 BTC per block, then 12.5 BTC, and it's now 6.25 BTC.
The next halving will make it drop to 3.125 BTC per block. This keeps the mining system going for longer, but also means that people need to provide more power to generate profits.
Block rewards in Bitcoin are systematically rounded down to the nearest "satoshi" (0.00000001 BTC) which means that ultimately there will be slightly less than 21 million minted. It's also estimated that about 20% of the world's Bitcoin has already been lost.
These lost coins technically still exist but are trapped in wallets where the owner has lost the private key or has passed away without sharing the password with anyone. In these cases it's impossible to regain access, so the funds are as good as gone.
What Happens When All the Bitcoin Is Mined?
As it stands a new Bitcoin is mined every 1.6 minutes. Despite how close the end seems to be, it could actually be a very long time until we reach the last one. If the halving continues at the current rate Bitcoin mining will go on until 2140.
While the rewards for completing blocks are becoming smaller, miners still have an incentive to keep going. Transaction fees that are paid out to miners are set to increase.
The price of Bitcoin has steadily gone up over the years, and will likely continue to do so. Even though miners are receiving fewer Bitcoins, each one will be worth more.
Many people don't understand the purpose of a limited supply, but having a cap helps Bitcoin hold value. Bitcoin scarcity, like with anything, makes people want it more. There are many kinds of different minerals, for example, found naturally all over the Earth - the ones with the most value are often the ones that are the rarest.
The growing value of Bitcoin along with the functional benefits it brings is leading to it having a much wider range of uses. Many big companies are starting to accept Bitcoin payments (as well as other cryptos) which is also increasing its value.
The Future of Bitcoin
Knowing what happens when all the Bitcoin is mined can help give an insight into the future of the cryptocurrency. Even as mining rewards are decreased, the number of people mining is still increasing. More companies and industries adapting to the world of crypto is also increasing the monetary value and overall usefulness of Bitcoin.
It's more than likely that the value of Bitcoin will continue to rise and people will continue profiting from it. As a fast-moving technology things are always changing. If you want to stay up to date with crypto click here to sign up for our newsletter.