by Viko

18 MILLION BITCOINS MINED, 3 MILLION LEFT — WHAT’S NEXT?

18 Million Bitcoins have been mined! 18 MILLION!

The most popular cryptocurrency now has 18 million BTCs in existence. After this, there are just three million left to be mined from a total of 21 million Bitcoin.

Bitcoin Halving

In May 2020, the scheduled “Bitcoin halving” will take place. This is where the reward for Bitcoin miners for solving a block gets reduced from 12.5 Bitcoins to 6.5 Bitcoins. At this time, there will be about 376,562.5 left to mine when the next halving occurs, which is due every four years. The code of Bitcoin’s blockchain is designed in such a way that limits the production of the cryptocurrency shows the same relation as gold, which opposes how the fiat money is easily printed. It is estimated that it will take 120 years until the last Bitcoin is mined. As explained by EO.Finance in a tweet:

“In just a week, the 18 millionth coin will be mined on the Bitcoin network. It will take another 120 years to get the remaining 14.3% of the total supply. In May 2020, the Bitcoin halving will take place doubling the mining difficulty.”

The next 3 million bitcoins will be progressively slower to mine as a result of block reward halvings which occur every 210,000 blocks (or roughly four years) and reduce new bitcoin supply by 50%. The final bitcoin is expected to be mined in 2140. Currently, with each block, miners get a subsidy of 12.5 newly created BTC, worth roughly $99,370, plus any additional transaction fees.

The scheduled halving of Bitcoin next year also drew some astronomic price projections with one German Bank, Bayerische Landesbank, predicting Bitcoin to reach a price of $90,000. Bitcoin’s price is expected to increase as its available mining supply dwindles. The most immediate tangible effect of the Bitcoin supply dropping is that, once supply hits zero, miners will go out of business. That’s unless they can live off transaction fees, which generate a pittance because very few use the network for transactions. Miners will evidently sell their Bitcoins for a higher price since the BTCs they are earning will be half of the current reward.

Satoshi’s coins are locked away, and careless hodlers have further diminished Bitcoin’s circulation. The community is biased towards the principles of the anonymous founder Satoshi Nakamoto and the Bitcoins he is holding. Cryptocurrency analytics firm Chainalysis reckons that some four million bitcoins are inaccessible, thanks to forgetfulness, theft, hardware malfunction, and death. That leaves only 14 million usable coins. Notably, it is said that about 14 to 19 percent of BTC is gone or lost forever. This does not even count coins that are stolen or the hundred thousand stashed away by Satoshi Nakamoto, the pseudonymous person believed to have created Bitcoin.

Unlike Ethereum’s blockchain, the world’s second-largest cryptocurrency, the Bitcoin blockchain has rarely seen backward-incompatible, system-wide upgrades changing core code features.

In the rare instances it has, the bitcoin community has gone through fierce governance disputes — such as the infamous scaling debates of 2017, which centered on a potential increase to bitcoin’s block size. The philosophical rift ultimately caused the Bitcoin crash in 2017.

120 years are quite far for now and complete mining of 21 million BTCs is giving birth to 2 powerful narratives. Following the halving feature, the currency in circulation divided by the number of new coins generated (flow to stock ratio) is going to increase. A high ratio, believers say, will push the value of “hard” currency up, and not down. The second narrative is more simplistic: the scarcer Bitcoin is, the more people will want to buy it. When only a few million bitcoins remain on the shelves, believers say, it will trigger a frenzied, shop-till-you-drop buying spree on Wall St. This sounds scarier considering the times after which the Bitcoin was invented (2008 global recession) where the price of an ‘asset’ is increasing and people want to take advantage of this bull run by buying and accumulating more Bitcoin. But it will only run till a finishing line where investors will decide not to spend more than a final price for it. And that is the point where the price bubble bursts. Still, a prospective hard fork that would change bitcoin’s 21-million-coin supply cap is conceivable, if not philosophical.

Eventually, when the entire Bitcoin supply is unlocked by miners, the way miners will be rewarded for continuing to secure and validate the network, will be provided by the way of fees associated with sending the crypto asset. While minor at today’s prices, if Bitcoin can truly reach prices of $100,000 to $1M USD per BTC, then fees may ultimately be enough to keep the network operation in full capacity.

Whatever the truth is, we have to wait for 2140 to find out.

-Viko

Oct 20, 2019

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