The decentralized, digital currency, Bitcoin, was created in January 2009 as a distributed ledger technology (DLT) by Satoshi Nakamoto, a pseudonymous author who published a white paper describing his ideas.
The identity of Bitcoin’s inventor is still unknown; but there isn’t a single entity that has control over Bitcoin, in contrast to currencies issued by governments.
On the blockchain, Bitcoin transactions are verified digitally and added to the blockchain record via mining. Verifying blocks of transactions on the decentralised blockchain ledger is done by solving complicated cryptographic hash problems.
It is possible to mine up to 21 million Bitcoins. Bitcoin’s source code was written by its inventor, Satoshi Nakamoto, and cannot be altered. There will be no more bitcoins to be mined, and they will stay at that level for the rest of the time.
As the Bitcoin supply ceiling is approached and eventually reached, mining will become significantly less lucrative. However, transaction fees, not freshly produced coins, will be used to compensate bitcoin miners at that moment.
Since its creation in 2009, around19 million bitcoins have been mined, about 90% of all available bitcoins.
In the future, new Bitcoins will be mined less frequently, Bitcoin mining rewards are lowered by half every 210,000 blocks and the average is every four years. A payout per block of 6.25 bitcoins was all that remained by 2022, down from the original incentive of 50 BTC in 2009.
Appreciating Bitcoin’s Fixed Supply
Decentralized, transparent, and unchangeable, the network’s groundbreaking distributed ledger technology produced a decentralised network that did not depend on third parties.
Nakamoto included a fixed quantity of BTC in the network’s code in order to curb inflation. As a result of its restricted supply, BTC is a valuable asset that might rise in value over time.
To maintain a constant supply of bitcoins, a predetermined number of coins will be created each year. A new bitcoin is added to the general supply each time a new block of bitcoins is mined.
Additionally, Nakamoto introduced the characteristic of halving the number of bitcoins each block creates every four years. There was a 50-bitcoin prize for contributing a block in 2009. Bitcoin’s current supply is 25 and that number will rise until no more bitcoins can be mined. Only 2 million bitcoins are left to be mined in the future, for a total of 19 million bitcoins produced so far.
What will happen to miners?
According to experts, by the year 2140, there will be no more bitcoins to mine. Miners will still be able to participate in the process of discovering new blocks, but they will no longer get a Bitcoin block reward, but will instead be reimbursed by the fees for each transaction contained in the newly found block.
Since miners now mint roughly 900 BTC (about $39.8 million) every day, transaction fees only make up a minor fraction of their earnings (between 60 and 100 BTC ($2.6 million to $4.4 million) daily). That implies transaction fees today account for just 6.5% of a miner’s earnings, but by 2140, that number will rise to 100%.
How Many Bitcoins Have Been Mined So Far?
In recent days, the number of bitcoins being mined has reached the 19 million mark, increasing the cryptocurrency’s value.
It was the parent company of Tokyo-based SBI Crypto Co. that mined the 19 millionth Bitcoin.
There is a limit on the number of Bitcoins that can be mined, just as there is for precious metals. A consensus among experts is that all 21 million bitcoins will have been mined by 2030 when 99.9% of the total supply will have been mined.
Approximately 2 million Bitcoins are still to be distributed, with 19 million mined till now. It is possible to mine up to 21 million Bitcoins.
On average, Bitcoin mining takes a long time
Two factors determine how many Bitcoins a crypto-miner is given for finishing a block: the amount of time it takes to mine a single Bitcoin and the number of Bitcoins that may be mined per block. According to data from Block Explorer, bitcoins are created at a rate of one every 1.6 minutes on average.
The End of the Story
Will Bitcoin still be a form of cash or a store of value in the year 2140? Over the next several decades, it is plausible, or even probable, that Bitcoin will continue to adapt as the Bitcoin ecosystem continues to grow. The main losers if Bitcoin’s supply is reduced are likely to be its miners, but investors in the cryptocurrency might also be hurt.