Will Miners be able to Profit when all Bitcoin is mined?

Bitcoin just like Gold must be “mined”. Gold is mined out of the ground and Bitcoin by computational means. They both have a limited supply which lends to the value of each. Bitcoin’s source code requires that it’s supply is limited and finite just as Gold. In fact, the amount of Bitcoin that will ever be produced is set at 21 million Bitcoin and these are released to the supply at the rate of one Block every 10 minutes. In addition to that, the amount of Bitcoin released in those “Blocks” are reduced by Half about every 4 years.

Once the 21 million supply is produced and released Bitcoin the worlds supply will be tapped out, and currently there have been 18.5 Million bitcoins mined. This leaves under 3 million left to be mined and put into circulation. What will happen when ALL Bitcoin are mined is the subject of much debate.

Important to remember: Even though the max number of Bitcoin is reached, because of lost keys, erroneous transactions and people passing away without leaving their private keys instructions to their heirs, the actual amount of available Bitcoin may be millions less!

Understand that Miners not only produce the Bitcoin for circulation into the ecosystem, but also serve to support and maintain Bitcoin’s decentralization Blockchain without a centralized entity controlling it.

Reaching the maximum number of Bitcoin in circulation could threaten the very existence of Bitcoin’s Blockchain if miners abandoned their work; this could mean a central force take over or a total collapse of the network.

Most likely though, Miners will continue to actively compete for the FEES that are paid for each transaction. These fees for a Block are in the hundreds of dollars at this time but could very well raise to thousands per Block in the future as the number of transactions increase.

chart from Investopia shows how Bitcoin has formed peaks within a year and a half of each halvings.

OTHER CONSIDERATIONS ACCORDING TO INVESTOPIA:

Other Considerations

“…it’s worth noting that it will be well over 100 more years before the bitcoin network mines its very last token. In actuality, as the year 2140 approaches miners will spend years receiving rewards that are actually just tiny portions of the final bitcoin to be mined. The dramatic decrease in reward size may mean that the mining process will shift entirely well before the 2140 deadline.”

“It’s also important to keep in mind that the bitcoin network itself is likely to change significantly between now and then. Considering how much has happened to bitcoin in just a decade, hard forks, new protocols, new methods of recording and processing transactions, and any number of other factors may impact the mining process. Even more generally, at some point before 2140 bitcoin may very well fall entirely out of favor, essentially rendering moot the entire thought experiment about what happens after the last token is mined.”

Given the information here, we can conclude that Mining Bitcoin will remain profitable even when all Bitcoins are mined. This is due to earning the transaction fees associated with each transaction.

https://www.investopedia.com/tech/what-happens-bitcoin-after-21-million-mined/

About the author

Gail holds one of the most challenging role in the Compumatrix Leadership: Membership. She ensures that that members and potential members enjoy the benefits of being part of the Compumatrix community.

Comments

  1. This article answers a very common question that pops up when someone first starts to understand how Bitcoin is created, through a mining process. The simple explanation here should help plenty of people to better understand what is expected, although not known for sure. I believe that miners will remain profitable from the always present fees that are charged on each and every Bitcoin transaction. It seems to me, logically speaking, that as the mass adoption of Bitcoin is realized, the amount of transactions will most likely increase exponentially and therefore provide a continuous stream of rising income for miners. .

  2. My thoughts too Kevin. Fees will continue and as more people use Bitcoin through mass adoption this will also increase the amount of fees plus I too think that the fees themselves will increase. As was explained in that article those fees will become a sort of “Tax” on transactions and we do need the miners to continue verifying for sure!!

  3. The very first sentence of this article is what attracted me to Bitcoin. With less and less trust in the bank, we wanted something that would be more secure from a financial standpoint. The scarcity of Bitcoin vs Gold, was one consideration. Bitcoin wins on this factor due to it having an absolute numeric value. Scarcity of Gold is questionable since there can be a Gold strike any time and any volume.

  4. interesting to say the least and I do wonder as I watch the daily ups and downs on the market of the price of Bitcoin n Ethereum and the other cryptos that are listed — I will be focused and very attentive when that 21 million number is reached and I do agree that even if no more Bitcoins are available there will always be ways to make money if You are lucky enough to have some —

  5. Many BTC’S are made daily which causes inflation. This will stop once the 21 millions BTCs has been made.
    I think the transaction fees will play a more significant role once this happens.
    The number of BTCs in circulation will decrease over time and this will also make the price go up.

  6. It’s an interesting topic. I do know that I won’t be around in 2140 to see how the miners are doing then ! LOL. It’s wonderful that after this last halving that Bitcoin has remained stable since then and has not fallen, or even gone up high for that matter, This speaks to the stability and longevity of the BITCOIN “currency” as money. Once again after this 4th halving, it did not scare the miners off at all. This is wonderful !

  7. Bitcoin causing inflation? I have to wonder about that Bjorn, as I haven’t seen any evidence of that. In my humble opinion, it’s the governments that cause inflation by their nonstop printing of money to service their debts. Isn’t this much like too much garden hose going into a shrunken pool? how long would the pool be able to stand this? By adding Bitcoin to the daily supply would be more like causing that water in the pool to ripple not grow deeper, and the number of dollars going into and out of Bitcoin currency from an exchange, I don’t believe is enough to change the pool size.

  8. I had previously been under the misconception that the last Bitcoin would be mined in 2040 and now thanks to this article I have discovered the truth which is that it won’t happen until 100 years later, in 2140. I must have misread the year when I first committed it to memory, years ago. I was probably skimming an article instead of reading it completely. I’m relieved that I didn’t share the wrong info with plenty of people. It is nice to now know that I am straight on this important fact.

  9. In my humble opinion, when all 21 million Bitcoin are mined, the price will go up some then stabilize at least until the fees begin to rise and if the fee become exceptionally high the price will drop again at least until the the fees become more reasonable for the user, the price will begin to rise again.

  10. I had doubts what would happen when I reached 21 million. But with your aritgo Gail, I now have a north to understand the future of this cryptocurrency. Thank you!

  11. The two questions everyone inevitably asks are answered here. First, what happens when there are no more BTC to mine, and second what happens if the miners quit? Personally looking at the rate that bitcoin has evolved in a decade I would think the time predicted will be much shorter than 2140. The adoption of cryptocurrency is growing at a much faster pace than most anticipated when first introduced. The road is being paved for future generations. The pioneers have embraced the challenge of finding a decentralized monetary system to seal the faith of buying and selling without a third party.

  12. From what I see and read, Miners have a long way to go and they shall demand more fees. They see the increasing demand for bitcoins and the IMPORTANT ROLE they play, in making those available to all of us. In 100 years from now, so many changes will be forthcoming. By that time, new developments will be put into place and future generations will reap benefits from all that is being implemented now.

  13. what an awesome reading through this blog — there are many opinions on cause of inflation and how much effect will bitcoin being sold out at 21 million would cause and I tend to think printing money has more effect than a certain amount of product like gold or silver — this will be very informative I believe as time goes — but I hope I have some bitcoin accessible to my life when we get there —

  14. I also tend to agree that the crypto economics world is growing much faster than people anticipated many years back by the experts so called — but i have learned in life that just because experts think this or that doesn’t make it gospel and honestly with the world in such upheaval with pandemic and other things the crypto world of economics if smart will push further and harder than ever before and give a safe place for world to keep their integrity and life in a safe mode —

  15. It is my understanding that the last Bitcoin won’t be mined for over 100 years from this part of the blog “…it’s worth noting that it will be well over 100 more years before the bitcoin network mines its very last token. In actuality, as the year 2140 approaches, miners will spend years receiving rewards that are just tiny portions of the final bitcoin to be mined. The dramatic decrease in reward size may mean that the mining process will shift entirely well before the 2140 deadline.”
    So going by this information, I don’t think we have anything to worry about just yet…lol

  16. I think this article is very interesting. If I understood this article correctly, it is saying that instead of mining for the BTC itself, miners will instead be “mining” for BTC transaction fees. This is a concept that is complex, but when all BTC is mined, that is all that there will be left to do (But by then, transaction fees alone might be a huge market.). This concept makes sense since it is like any other market/industry. As markets and industries age, they adapt to fit consumer needs.

  17. Great info Gail! This goes to show miners will not be out of business even after the last bitcoin is mined. They will continue to earn from transaction fees for as long as bitcoin continues to be in circulation. What a brilliant mind, an unusual foresight and imagination this Satoshi Nakamoto has. But then, isn’t Compumatrix also blazing a new trail…..treading a path not taken?

  18. After reading this blog I had to go to Google to do some research trying to figure how 18.5 million bitcoin got mined in 10 years and why it will take 140 years to mine 2.5 million more. Well that was quite a lot of reading and figuring out and lots of variables but I have come to the conclusion because of the halving’s every 4 years it actually could take that long but then again if our technology advances before then with more powerful computers it could be a little sooner.

    1. I believe you are exactly right, Tim. The halving IS the reason it will go on that long. With your thinking, though, who knows, technology may develop that cuts that time drastically. But that was what was planned when the Bitcoin Whitepaper came out. We shall see how that plays out. May I suggest duckduckgo as a search engine instead of Google? It is private and doesn’t follow you around—just a suggestion.

  19. This article makes sense to me because eventually there will be no more halving that will take place because all the bitcoin will have been mined. What this blog post says though is that miners will be able to profit off of the transaction fees of bitcoin. I did not know miners could profit off of transaction fees – I learn something new every day! My question is, will it really be worth mining if one can only profit off of the transaction fees?

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