Experts Predict What Will Happen When All Bitcoins Are Mined
January 3, 2009, is a day that signifies an era in the digital finance realm as the mysterious Satoshi Nakamoto unveiled the genesis block. This monumental act would forever change the course of financial history.
Nakamoto minted the first 50 Bitcoin (BTC), the start of a revolutionary industry that would later blossom into the multibillion-dollar phenomenon known as cryptocurrency mining.
How Bitcoin Is Created
Bitcoin is an innovative digital currency created through a complex mining process. Miners diligently work through challenging mathematical problems utilizing the power of computer hardware and validating transactions on the blockchain.
For each block of transaction, they successfully process, these skilled miners receive a predetermined allocation of BTC as a reward for their efforts. According to information from the Blockchain Council, over 19 million BTC has been given to devoted miners as block rewards.
Interestingly, Nakamoto’s famous Bitcoin white paper indicated that a limit of 21 million BTC should be in supply circulation. Meanwhile, Nick Hansen, a top-level executive at Luxor Mining, recently expressed his opinions regarding the constantly changing Bitcoin mining landscape, especially the reduction in block rewards.
He asserts that miners will continue to perform their essential duty of validating and preserving transactions on the blockchain regardless of this decline in block rewards. According to current on-chain data, miners who successfully validate a new block are rewarded with 6.25 BTC ($188,381).
In addition, miners also received transaction fees for their activities.
A Long Wait For The Last Mined BTC
Based on the halving process, Hansen revealed that the elusive final BTC is predicted to occur in 2140. He based his prediction on the halving cycle’s reoccurrence every four years, specifically every 210,000 blocks of transactions.
Rewards for Bitcoin miners are halved to balance the economics of BTC supply and demand. The next halving is anticipated again around April 2024. After that, each block validation will result in a 3.125 BTC reward for miners, currently equivalent to $94,190.
The halving aims to control the BTC supply. The value of each coin is anticipated to increase due to the coin’s limited supply and rising demand.
However, Hansen argues that several unforeseen factors make it difficult to predict the price of Bitcoin in the year 2140. Such factors include market demand, law alterations, technological advancements, and broader economic influences.
What Will Happen To Fiat?
Analyst Jaran Mellerud predicts that the value of Bitcoin will surpass that of conventional currencies like the US dollar after the last Bitcoin is mined. He believes that traditional financial systems will eventually fail, paving the way for Bitcoin to replace them as global payment settlements.
Meanwhile, experts have foreseen fiat money systems’ downfall for quite some time, primarily because of the numerous issues affecting the conventional finance industry setup. For instance, the world witnessed the collapse of Silicon Valley Bank, triggered by a liquidity crisis in March 2023.
Soon after, Signature Bank and Silvergate Bank faced similar fates, adding to the mounting concerns. The collapse of these banks had ripple effects on the finance industry, including the crypto industry, as these banks were termed crypto-friendly banks.
A survey conducted by Morning Consult, a leading business intelligence company, revealed that most people would prefer credible alternatives to the current global finance system.
Bitcoin Mining May Change In The Future
Nevertheless, co-founder and CEO of Bitwave, a digital assets platform, Pat White, opined that miners will continue to play a crucial role in the ecosystem. However, he anticipates that some miners will face difficulties and close down operations as costs rise.
A March 2023 report by on-chain data platform, Glassnode shows that miners have been experiencing prolonged periods of unprofitability since 2010. The report added that miners were only profitable on 47% of their trading days.
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