One day, Bitcoin mining will cease and those who previously spent their time and resources mining, will have to deal in transaction fees as their incentive instead. This could cause a problem for everyone.
Current Bitcoin Stats in Summary
- There are 21 million Bitcoins that are available to be mined
- Currently, 18,857,862.5 Bitcoins have been already mined which counts for 89.799%
- There are 2,142,137.5 Bitcoins left available for mining
- In this four year cycle, 900 new Bitcoins can be mined every day throughout the world
- It’s estimated that the final supply of Bitcoins will be released somewhere around 2140 when the 21 million will finally be reached
- Presumably, if nothing else changes, miners and investors will use transaction fees as their “replacement” reward once this stage comes
- Bitcoin cannot go beyond 21 million, no new Bitcoins will ever enter circulation
Satoshi Nakamoto, the pseudonym of Bitcoin’s creator(s), is the one who set a limit on the number of Bitcoins that could ever be mined. The total amount being set at 21 million bitcoins.
There are also a couple of stipulations in place to further limit the number that can be mined and control the supply being put into circulation every day.
Firstly, the network fixes the introduction rate for bitcoins to the cryptocurrency supply, which comprises of one block roughly every ten minutes.
Secondly, the number of Bitcoins that miners can release from these blocks reduces by half every four years. When Bitcoin was first established, the reward was 50 Bitcoin. However, because this has halved every 210,000 blocks (roughly every four years), the reward fell from 50 BTC, to 25 BTC, to 12.5 BTC.
Now it is at its current rate of 6.25 BTC, after the cut happened mostly recently back in May 2020. We can expect this to drop to 3.125 BTC per block sometime in 2024.
While all these stipulations mean that reaching the magical 21 million becomes slower each four years, nearly 90% of all available Bitcoins have already been mined.
Have Any Bitcoins Been Lost?
Unfortunately, the answer is yes. Over the last decade, an unknown number of Bitcoins have been lost. Just a quick Google search will show you countless stories of people who died without having the chance to tell anyone their private key details.
Similarly, people have forgotten their private keys over the years and have been effectively locked out of their own assets unable to access any BTC they legitimately own.
For every story along these lines that makes the news, there are dozens of examples that don’t make the headlines. This means it’s impossible to know exactly how many Bitcoins have been “lost” throughout the years. While these, potentially, millions of coins have been mined, no one will ever be able to use or buy them.
What Will Miners Do When All The Bitcoin Has Been Mined?
While the day that Bitcoin runs out is relatively far away, that day will still come. What will happen when it does? Well, once every available Bitcoin has been mined, the network will more or less go on the same just with one important difference.
After this time, miners will still be allowed to participate in the block discovery process, but they will just no longer be compensated with Bitcoin block rewards. However, this doesn’t mean they won't be compensated in some other way.
Bitcoin miners will receive all the fees spent on the transactions included in each newly discovered block as well as the block rewards. Currently, transaction fees only account for a small proportion of a miner’s income.
Right now, miners mint around 900 BTC (~$39.8 million) a day, but earn between 60 and 100 BTC ($2.6 million to $4.4 million) in transaction fees each day. So, transaction fees make up 6.5% of a miner’s revenue. This is a small amount at the moment but in 2140 that 6.5% will become 100%.
Bitcoin miners aren’t incentivized by transaction fees in 2021 and a system based only on transaction fees would also certainly fail. However, this will be a totally different story in the future.
According to Simon Kim, CEO of VC fund #Hashed in a comment to Decrypt. “Changes to the Bitcoin ecosystem and its place as a key currency in the virtual world could drive significant changes in miner adoption even after the block rewards stop.”
So, while we still have a way to go before the world effectively runs out of Bitcoin, it’s becoming increasingly harder to mine Bitcoin in large numbers. If there was ever a time to start mining, it’s now.
Act Now with Mining Syndicate
If you would like any more information about starting or expanding your Bitcoin horizon; reach out to us at Mining Syndicate. Our mission is simple: Strengthen the Bitcoin network by enabling small-scale miners to affordably purchase and reliably host miners.
As a small miner, Chris became frustrated by the lack of hosting options available for miners with under 100 units. As luck would have it, he found a 2.5MW mining facility for sale right down the road, and thus, Mining Syndicate was born. Facilities #2 and #3 are already in the works.
Why is Mining Syndicate so successful? Because we have a team of people who are just like you, eager to be a part of the future of mining. If you would like more information about how you can be a part of Mining Syndicate, how our facility works, or the products we sell, you can reach out to us:
We look forward to hearing from you and having you as part of our team!