- >How Will Bitcoin Work When All Bitcoin Has Been Mined?
How Will Bitcoin Work When All Bitcoin Has Been Mined?
There will come a day when every single bitcoin has been mined. That day will be around the year 2140. That is, unless there is some quantum leap in computational ability that renders bitcoins mining algorithm useless. Lets for now just assume that everything goes to plan, and every 210,000 blocks bitcoin halves its mining reward. Eventually we will reach a day when the mining reward is smaller than the smallest unit of bitcoin. From them on, there will be no block reward, other than the fees generated by transactions. What will a future like this look like?
Keegan Francis | Dec 4, 2020
The Year 2140
It is impossible to predict what the year 2140 will look like, but let’s try to narrow in on a single aspect of it, Bitcoin. After all the bitcoin has been mined, we must acknowledge the possibility that no one is using bitcoin anymore. It is entirely possible that we will have progressed to something far exceeding the technological marvel that bitcoin is. It’s also possible that the people of the planet have unified themselves around the new planetary reserve currency. What is more likely is that something in between these two extremes is the actual future. First we need to explain what happens on a technical level, then make predictions about the implications.
Bitcoin Stops Mining
After the last halving event, it is not like there will be no more block reward. The block reward is made up of the transaction fees paid to the network, as well as the mining reward. So there will always be a financial incentive for miners to participate, the thing is, it will be less in the future. How much less will it be though? The mining reward is already quite small in comparison to where it was when the network began on January 3, 2009. As of right now, the mining reward is 6.25 bitcoin, whereas just 10 years ago it was 8 times as much. In fact, most of the bitcoin that will ever be in circulation, are already in circulation. So over time, the mining reward tends to matter less as the absolute amount is reduced.
However, the mining reward is still relevant if the value of bitcoin continues to rise as quickly as it has in the last 10 years. There are logarithmic charts that seem to indicate that bitcoin is on a logarithmic journey upwards. In this case, the miner reward will always matter, as this truly indicates that every satoshi counts.
Bitcoin is Gold
By the year 2140, humans will have most likely figured out interplanetary travel, as well as asteroid mining. The argument that gold is not truly scarce starts to really matter when humans figure out asteroid mining. If this happens, that Bitcoin does truly become the ultimate scarce asset. You may alter the supply of gold in existence, but you may not alter the supply of bitcoin. This fact alone is something that many are paying attention to. One societal trend is that while the older generation tends to like gold, the younger generation prefers Bitcoin. By the year 2140, we will have become a civilization that has been immersed in the digital age and more for more than 100 years. By then, we will all be thinking about bitcoin as digital gold.
More than Half of All Bitcoin is Lost
Another factor that may drive the scarcity of bitcoin, is the amount of lost or unrecoverable bitcoin on the planet. Every time a miseducated user of bitcoin loses the keys to their wallet, bitcoin becomes more scarce. It is akin to sinking a boat full of gold. That bitcoin is forever removed from circulation, adding to the already inherent scarcity of bitcoin. Currently it is speculated that 20% of all bitcoins are lost. That number is inclined to rise as more and more people that don’t understand proper key management lose the keys to their bitcoin.
Bitcoin is Engrained in the Fabric of our Payment Systems
By the year 2140, bitcoin will have become the lifeblood of the payments industry. There will be several systems like the lightning network that supplement the bitcoin network to make it seamless throughout the entire world. We will have the internet beamed anywhere on the planet to us by satellites. Everyone will be part of the financial internet that is brought to us through technologies that are connected to bitcoin. Smaller transactions will be settled on the peripheral networks, with only large transactions being settled on the core of the network.
The Value of Bitcoin in 2140
By the year 2140, we may be asking how many bitcoin is that bread worth, instead of how much is bitcoin worth. Right now, everyone more or less thinks of things in the currency that is most relevant to them. That may be the USD, CAD, or EUR. The world thinks most, in terms of the USD. Everything is thought of in terms of the value of the USD, even oil. While some economists believe that we are headed for an oil based reserve system, I think in 2140, we’ll be on a bitcoin backed system. As the USD loses its reserve status over the course of the next thirty years, we will see various units of account vie for the status of global reserve currency. All gold is currently worth $10 trillion dollars, could we see bitcoin achieve these levels?
Bitcoin Continues to Work the Same as it Does Now
To bitcoin, everything will be business as usual. It will continue processing transactions, and marching towards producing the next block. Slowly and steadily. As pandemics and the invention of space travel happen in the world, bitcoin will continue. That’s one of the greatest aspects about bitcoin, it’s not a company, government, or person that needs to respond to global events. It does one job, and it does it well. It keeps track of my bitcoin. It will keep track of my bitcoin, even if I don’t touch it for 120 years.