What Happens to Bitcoin After All 21 Million Are Mined

5.0

14 Feb, 2022

6 min read

804 Views

icon
There will be no more bitcoins created after the Bitcoin supply reaches its top limit. Transaction fees are expected to be the only source of income for bitcoin miners.

One of the most distinguishing features of Bitcoin (BTCUSD) is its restricted coin supply. Satoshi Nakamoto, the cryptocurrency's creator, envisioned Bitcoin as digital gold and set a limit on its supply to reflect the limited nature of genuine gold.

The quantity of bitcoins that can be issued (mined) is limited to 21 million. Every 10 minutes, new bitcoins are added to the Bitcoin supply, which is the average amount of time it takes to create a new block of Bitcoin. 1 After every 210,000 blocks, or roughly every four years, the number of bitcoins minted every block is cut by 50% by design.

Will there ever be a total of 21 million Bitcoins

It is unlikely that the total number of bitcoins issued will surpass 21 million. This is because the Bitcoin network employs bit-shift operators, which are arithmetic operators that reduce decimal points to the smallest integer possible.

When the block reward for producing a new Bitcoin block is divided in half and the amount of the new reward is determined, this rounding down may occur. One satoshi equals 0.00000001 bitcoins, hence the award is expressed in satoshis. A satoshi cannot be divided in half since it is the smallest unit of measurement in the Bitcoin network. When dividing a satoshi in half to determine a new reward amount, the Bitcoin blockchain is programmed to round down to the next whole integer using bit-shift operators. Due to the continuous rounded down of Bitcoin block incentives in fractions of satoshis, the total amount of bitcoins distributed is likely to fall short of 21 million.

The final bitcoin is not projected to be generated until the year 2140, given the number of new bitcoins issued every block decreases by half every four years. When Bitcoin was first created, the amount of new bitcoins issued every block was 50, however that number has now dropped to 6.25 as of May 2020.

Although there is a limit of 21 million bitcoins that can be created, the number of bitcoins in circulation is likely to be much lower. If Bitcoin wallet owners forget their main passwords or die away without passing their wallet information, they may lose access to their assets. According to a research released in June 2020 by the crypto forensics firm Chainalysis, up to 20% of all Bitcoins issued could be permanently destroyed.

 

What Occurs When There Are 21 Million Bitcoin

No additional bitcoins will be issued when the maximum number of bitcoins has been achieved, even if that amount is slightly less than 21 million. Bitcoin transactions will continue to be pooled and processed into blocks, and Bitcoin miners will be compensated, although most likely simply with transaction processing fees.

Bitcoin miners are likely to be impacted when the cryptocurrency reaches its upper supply limit, but how they are impacted depends in part on how Bitcoin develops as a cryptocurrency. Bitcoin miners may still be able to earn simply on transaction processing fees if the crypto blockchain processes a significant number of transactions in 2140.

Even with low transaction volumes and the removal of block rewards, miners can still earn in 2140 if Bitcoin is primarily used as a store of value rather than for daily transactions. Miners can charge hefty transaction fees to process big-value transactions or huge batches of transactions, with more efficient "layer 2" blockchains like the Lightning Network assisting daily bitcoin spending.

However, if Bitcoin mining becomes unprofitable in the absence of block rewards, the following undesirable consequences may occur:

  • Miners may create cartels in an attempt to gain control of mining resources and command greater transaction fees.
  • Selfish mining occurs when miners conspire together to keep fresh legitimate blocks hidden and then release them as orphan blocks that have not been confirmed by the Bitcoin network. This method can lengthen block processing periods and ensure that when new blocks are finally issued to the blockchain, they are accompanied by large fees.

Final Thoughts

In the year 2140, will Bitcoin work similarly to cash or gold bars? Bitcoin's environment is still evolving, so it's feasible, if not likely, that it will continue to evolve over the next few decades. However, no additional bitcoins will be released after the 21-million coin cap is met, regardless of how Bitcoin evolves. The impact of reaching this supply limit is most likely to be felt by Bitcoin miners, but it's possible that Bitcoin investors could suffer as well.

 

Disclaimer: This blog is exclusively for educational purposes and does not provide any advice/tips on investment or recommend buying and selling any stock.

Angel One Limited does not endorse investment and trade in cryptocurrencies. This article is only for education and information purposes. Discuss with your investment advisor before making such risky calls.

How would you rate this blog?

Comments (0)

Add Comment

Related Blogs

  • icon

    How To Use a Moving...

    07 May, 2022

    6 min read

    READ MORE
  • icon

    Deadweight Loss Of Taxation

    31 Jan, 2022

    7 min read

    READ MORE
  • icon

    Ratan Tata's Youngest...

    15 May, 2022

    4 min read

    READ MORE
  • icon

    ​​Dr APJ Abdul Kalam:...

    14 Apr, 2022

    5 min read

    READ MORE
  • icon

    Russia vs Ukraine War:...

    10 Mar, 2022

    7 min read

    READ MORE
  • icon

    What is Pre-Market...

    10 Feb, 2022

    6 min read

    READ MORE
  • icon

    ​​Dhirubhai Ambani’s Success Story

    07 Mar, 2022

    7 min read

    READ MORE
  • icon

    Success Story of Vijay Kedia

    21 Oct, 2021

    8 min read

    READ MORE
  • icon

    Nirmala Sitharaman’s Success Story

    26 Mar, 2022

    5 min read

    READ MORE
  • icon

    Why Gold Rate is...

    13 May, 2022

    5 min read

    READ MORE
  • icon

    LIC Seeks to Appoint CFO

    13 Oct, 2021

    6 min read

    READ MORE
  • icon

    IPO Advantages and Disadvantages

    03 Oct, 2021

    7 min read

    READ MORE
  • icon

    Crypto Ban in India?

    25 Jan, 2022

    6 min read

    READ MORE
  • icon

    Top 7 Types of Investment...

    11 May, 2022

    8 min read

    READ MORE
  • icon

    Aman Gupta: Success Story...

    17 May, 2022

    5 min read

    READ MORE
  • icon

    IRCTC Stock and Share Split

    03 Dec, 2021

    7 min read

    READ MORE
  • icon

    Mark Zuckerberg's Success...

    25 May, 2022

    5 min read

    READ MORE
  • icon

    Top 6 Types of Trading in...

    05 May, 2022

    7 min read

    READ MORE
  • icon

    Stock Trading Bot

    03 Nov, 2021

    7 min read

    READ MORE
  • icon

    10 Day Trading Strategies...

    28 Dec, 2021

    4 min read

    READ MORE
  • icon

    Sundar Pichai: Success...

    31 Mar, 2022

    6 min read

    READ MORE
  • icon

    A Beginners Guide To...

    02 May, 2022

    7 min read

    READ MORE
  • icon

    What is Guerrilla Trading?

    01 Nov, 2021

    7 min read

    READ MORE
  • icon

    An Introduction to Trading...

    10 Nov, 2021

    7 min read

    READ MORE
  • icon

    LIC IPO: Benefits for Policyholders

    18 Feb, 2022

    7 min read

    READ MORE
  • icon

    LIC IPO: Expected Date, Price, DRHP

    18 Feb, 2022

    7 min read

    READ MORE
  • icon

    Futures Options Strategy Guide

    19 Jan, 2022

    8 min read

    READ MORE
  • icon

    Lenskart Startup Story:...

    29 Mar, 2022

    6 min read

    READ MORE
  • icon

    The Success Story of Jack...

    22 Oct, 2021

    5 min read

    READ MORE
  • icon

    Shiv Khera | Every Success...

    21 Apr, 2022

    5 min read

    READ MORE
  • icon

    Ashneer Grover Biography -...

    28 Feb, 2022

    5 min read

    READ MORE
  • icon

    Upcoming IPO in Nov-2021

    08 Nov, 2021

    8 min read

    READ MORE
  • icon

    ​​Sugar Stocks Down as Sensex Falls

    29 Oct, 2021

    7 min read

    READ MORE
  • icon

    Welfare Loss of Taxation

    28 Oct, 2021

    7 min read

    READ MORE
  • icon

    Commodities Trading: An Overview

    25 Aug, 2021

    9 min read

    READ MORE
  • icon

    Invesco drags Zee to NCLT

    06 Dec, 2021

    8 min read

    READ MORE
  • icon

    Raamdeo Agrawal: How...

    13 Jan, 2022

    10 min read

    READ MORE
  • icon

    Success story – Anil Ambani

    23 Sep, 2021

    6 min read

    READ MORE
  • icon

    Taxation Rules for Bond Investors

    03 Jan, 2022

    4 min read

    READ MORE
  • icon

    Investors Walk Away from...

    27 Oct, 2021

    7 min read

    READ MORE
  • icon

    Paytm IPO

    08 Nov, 2021

    7 min read

    READ MORE
  • icon

    The Future Of...

    16 Feb, 2022

    8 min read

    READ MORE
  • icon

    LIC IPO Details: Should...

    18 Feb, 2022

    6 min read

    READ MORE
  • icon

    How Does Bitcoin Mining Work

    21 Jan, 2022

    7 min read

    READ MORE
  • icon

    What is Cryptocurrency?

    09 Oct, 2021

    7 min read

    READ MORE
  • icon

    Forex Trading: A Beginner's Guide

    27 Aug, 2021

    6 min read

    READ MORE
  • icon

    Understanding Different...

    09 Mar, 2022

    8 min read

    READ MORE
  • icon

    Taxation in 2022:...

    11 Apr, 2022

    7 min read

    READ MORE
  • icon

    SEBI revises risk...

    07 Dec, 2021

    8 min read

    READ MORE
  • icon

    Top 5 IPOs of 2021

    01 Feb, 2022

    6 min read

    READ MORE
  • icon

    Taxation on Mutual Funds

    04 Oct, 2021

    6 min read

    READ MORE
  • icon

    Top 10 Most Inspirational...

    27 Apr, 2022

    7 min read

    READ MORE
  • icon

    Top 4 Biggest Common Crypto Scam

    21 May, 2022

    8 min read

    READ MORE
  • icon

    Should you Invest in the...

    30 Aug, 2021

    7 min read

    READ MORE
  • icon

    Exploring top Retirement...

    08 Oct, 2021

    7 min read

    READ MORE
  • icon

    Exploring Ed-Tech Giant...

    02 Mar, 2022

    8 min read

    READ MORE
  • icon

    LIC IPO: All we Know So Far

    05 Oct, 2021

    7 min read

    READ MORE
  • icon

    Byju’s IPO Plans

    06 Oct, 2021

    5 min read

    READ MORE
  • icon

    Preference Shares:...

    17 Mar, 2022

    6 min read

    READ MORE
  • icon

    Investing in Cryptocurrency

    06 Apr, 2022

    7 min read

    READ MORE
  • icon

    Tax on Cryptocurrency

    04 Apr, 2022

    6 min read

    READ MORE
  • icon

    How to Create Your Own...

    25 Apr, 2022

    8 min read

    READ MORE
  • icon

    Long-Term Investments

    28 Jan, 2022

    7 min read

    READ MORE
  • icon

    Should You Invest in...

    10 Oct, 2021

    8 min read

    READ MORE
  • icon

    Environmental Impact of...

    09 Nov, 2021

    7 min read

    READ MORE
  • icon

    Understanding Taxation on...

    26 Oct, 2021

    7 min read

    READ MORE
  • icon

    Taxation of Permanent...

    02 Dec, 2021

    7 min read

    READ MORE
  • icon

    India’s top 10 favourite...

    22 Dec, 2021

    8 min read

    READ MORE
  • icon

    What are Indirect Taxes?

    15 Mar, 2022

    7 min read

    READ MORE
  • icon

    Basics of Algorithmic...

    21 Feb, 2022

    7 min read

    READ MORE
  • icon

    Top 5 eco-friendly cryptocurrencies

    21 Dec, 2021

    9 min read

    READ MORE
  • icon

    10 Ways to Profit in a Bear Market

    30 Nov, 2021

    8 min read

    READ MORE
  • icon

    Pair Trading Logic

    26 Aug, 2021

    6 min read

    READ MORE
  • icon

    What Is Double Taxation?

    11 Jan, 2022

    7 min read

    READ MORE
  • icon

    Capital Gains Tax

    23 Mar, 2022

    5 min read

    READ MORE
  • icon

    Top 10 Stocks for 2022

    29 Apr, 2022

    7 min read

    READ MORE
  • icon

    Options Trading Explained:...

    01 Oct, 2021

    8 min read

    READ MORE
  • icon

    5 Stocks to Watch Out for...

    05 Jan, 2022

    8 min read

    READ MORE
  • icon

    Gold Bond Investment in India

    07 Oct, 2021

    6 min read

    READ MORE
  • icon

    Income Tax in India -...

    02 Oct, 2021

    7 min read

    READ MORE
  • icon

    Stocks to Watch: Reliance...

    29 Dec, 2021

    5 min read

    READ MORE
  • icon

    Why Elon Musk Bought...

    29 May, 2022

    5 min read

    READ MORE
  • icon

    Cryptocurrency Insurance,...

    08 Nov, 2021

    6 min read

    READ MORE
  • icon

    Stocks to Watch: NMDC,...

    24 Aug, 2021

    5 min read

    READ MORE
  • icon

    Nykaa Success Story -...

    22 Dec, 2021

    8 min read

    READ MORE
  • icon

    Clean Science, GR...

    23 Aug, 2021

    6 min read

    READ MORE
  • icon

    Double Taxation Hangs On...

    01 Dec, 2021

    8 min read

    READ MORE
  • icon

    Is Google a Good Investment?

    11 Nov, 2021

    8 min read

    READ MORE
  • icon

    Indian Railways Share...

    24 Sep, 2021

    7 min read

    READ MORE
  • icon

    Blue Chips Fuel Record

    25 Oct, 2021

    6 min read

    READ MORE
  • icon

    Foreign Investment Funds...

    02 Feb, 2022

    6 min read

    READ MORE
  • icon

    What Are the Risks of...

    19 May, 2022

    7 min read

    READ MORE

Translate the power of knowledge into action. Open Free* Demat Account

* T&C Apply

Latest Blog

Ready To Trade? Start with

angleone_itrade_img angleone_itrade_img

Subscribe to #SmartSauda Newsletter

Open an account