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What will happen after mining the entire Bitcoin (21 million units)?


 What will happen after mining the entire Bitcoin (21 million units)?

A question that has been repeatedly asked about by observers of the crypto market, who are wondering about the fate of Bitcoin after the completion of the mining of 21 million units of it.

The entire Bitcoin mining process is expected to take place completely in the year 2140, meaning that you, the reader of the article, and I alike, will not witness the end of the process.

The Bitcoin blockchain is designed around the principle of controlled supply, which means that only a fixed number of newly minted bitcoins can be mined each year until a total of 21 million digital currencies are issued.

Once you complete the extraction of 21 million Bitcoins, the network will operate pretty much the same as it is now, albeit with different rewards for miners.

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When will the last bitcoin be mined?

Roughly every ten minutes, miners “discover” a new block of bitcoin, and solve a cryptic mystery that allows successful mining to add the newly discovered block to the blockchain.

This block is filled with transactions previously awaiting in the bitcoin memory pool, which are usually chosen based on the amount of transaction fees that have been allocated by Bitcoin dealers.

In exchange for discovering a block, the mineral receives a fixed Bitcoin block reward.

When Bitcoin was first launched, the reward was set at 50 Bitcoin, but it decreases periodically, after every 210,000 new blocks.

This happens roughly every four years, and reduces the reward to 25 BTC, 12.5 BTC and 6.25 BTC ...

Three forkings have been completed so far, the third fork in Bitcoin occurred on May 11th, which reduced the block reward to 6.25 Bitcoin.

Bitcoin miners will be able to continue earning block rewards until a total of 21 million Bitcoins are released, after which no new Bitcoin will enter circulation.

Currently, around 18.6 million bitcoins have been produced, which is equivalent to 87.8% of the maximum bitcoin supply in more than a decade.

But it will take another 120 years before the last bitcoin is minted, due to the gradual decline that occurs every four years as a result of the bonus split.

What will miners do when they have finished extracting 21 million bitcoins?

We arrived at the focus of the article and the answer to the question posed:

What will happen after mining the entire Bitcoin (21 million units)?

Once all bitcoins are mined, Bitcoin miners will still be able to participate in the block authentication process, but they will not be incentivized as was previously the case with the extracted bitcoin blocks, but rather the miners will be rewarded with transaction fees.

For your information, at present, transaction fees constitute small percentages of the miners' revenues, as they currently mine about 900 petitons, equivalent to $ 8.5 million.

But they earn anywhere from 30 to 50 bitcoins in transaction fees that is about 285,000 to 475,000 dollars every day.

This means that transaction fees currently account for no more than 3.3% of miner's revenue but in 2140, this figure will reach 100%.

Losing the block reward will not cause miners to neglect, according to Simon Kim, chief executive of the #Hashed Fund, who stated:
Changes to the Bitcoin ecosystem and its position as the main currency in the virtual world could lead to major changes in the adoption of miners even after the mining rewards have ceased.

 Bitcoin transaction fees peaked during 2017

It is true that switching to bonuses based on purely transaction fees will almost certainly wipe out the mining network, given that few bitcoin miners would be able to profitably mine Bitcoin if they got only 3.3% of their typical rewards.

However, if the network explodes in use, competition for block space could increase dramatically, which could potentially lead to higher transaction fee rewards in favor of miners, similar to what was seen during the Bitcoin race in 2017.

At the peak of bitcoin in December 2017, total transaction fees paid per day rose to 1,495 BTC at a time when the bitcoin price was at $ 14,000.

As a result, miners received a total of $ 21 million in transaction fees that day which is more than they currently earn from a block reward, indicating that something similar to this may happen in the future.

While some analysts, including Luca Buskin, head of the marketing department at the crypto trading platform, “NewsCrypto,” believe that Bitcoin, before reaching the end of the mining process, estimated in the year 2140, will make major amendments to its protocol, including the possibility of turning into a proof-of-stake mechanism instead of the proof-of-work. He uses it at the moment.