What Happens to Bitcoin After All 21 Million Are Mined?
The decentralized currency bitcoin is limited in supply which is mined by solving a high-level mathematical puzzle by the computers. There are only 21 million bitcoins that can be mined ever in the future, out of which; about 91.23% of bitcoins have been already mined, which accounts for around 19.1 million bitcoins. Bitcoin mining is based on the controlled supply principle, which states that only a certain number of new bitcoins can be mined yearly.
Bitcoin miners are rewarded with block rewards, which are a fixed number of bitcoins received for the discovery of each bitcoin block. If all the bitcoins are mined, these miners will not get a block reward because no new bitcoin will come into circulation. After mining all 21 million bitcoins, all the bitcoins will remain in circulation through bitcoin transactions. All the bitcoins are expected to be mined by 2140 due to future mining mechanism changes.
How do Bitcoin miners earn?
Bitcoin miners mine bitcoins by solving cryptographic mathematical problems every ten minutes. After solving each problem, miners discover a new bitcoin block, which is then added to the blockchain.
For the discovery of every bitcoin block, the miners get a fixed number of bitcoins in return for their mining, called "block reward". Initially, this block reward was 50 bitcoins for every new block, but this reward reduces by half after mining every 2,10,000 new bitcoin blocks. The time taken for the reward to get half is around four years. After the first half, the reward was reduced to 25 bitcoins for every block, then reduced to 12.5 bitcoins, and then 6.25 bitcoin. Till now, the reward has been cut three times, the last halving was done in May 2020, and the current reward as of 2022 is 6.25 bitcoins for each block mined every ten minutes. But, the miners will only earn this block reward until all the 21 million bitcoins are mined.
Besides the bitcoin block reward, the miners also receive transaction fees. It is the fee spent on each transaction of newly discovered bitcoin. It is relatively lower than the block reward. Miners mine around 900 bitcoins daily and earn almost 60 to 100 bitcoins through transaction fees daily. It accounts for just 6% of the total miner's revenue, but after mining all 21 million bitcoins, its share in the payment will reach 100% because it will be the sole revenue-earning option for the miners.
What will happen when mining stops?
After mining all the 21 million bitcoins, the miners will remain participants in the bitcoin mechanism. The only change that will undoubtedly occur is that they won't be able to get block rewards, but still, they will continue to earn through transaction fees. The end of bitcoin mining will shift from block-based tips to a transaction fees-based approach. The transaction fee will grow inverse to the block reward because with the reduction in block reward, there will be coordinated growth in the earnings through transaction fees.
Future Possible Changes in the Bitcoin Mining Revenue
What will happen if all the miners stop mining bitcoins?
In case all or majority of the bitcoin miners stop the mining of bitcoin blocks, it is still possible for the users to view the bitcoin's wallet address and its transaction history. The only effect will be on new bitcoin transactions because for the new transactions, the new bitcoins are necessary. If there is no mining of new bitcoins, its future spending will stop.
For miners, even after the stoppage, the transaction cost will be their reward.