We know that Bitcoin’s circulation in the market is pre-defined. The circulation limit is fixed to 21 million and in that, around 18 million have already been mined. The miners will mine the remaining coins till the limit is reached and there will be no more Bitcoins left to be mined. Due to this limited supply of Bitcoin, supporters generally compare this asset with Gold.
If we consider that there will be no changes to the protocol, Bitcoin’s maximum cap will be attained by the year 2140. According to the protocol, Bitcoin Halving takes place at every 210,000 blocks. Halving makes producing more coins in the circulation difficult and reduces the mining reward. Currently, the mining reward is 12.5 BTC. This is supposed to become half in the next halving which will take place in 2020. In May 2020, the reward will reduce to 6.25 BTC.
As there are only under 3 million coins left to be mined, let us understand through this blog about what will happen when there will be no more Bitcoins left to be mined? Let us start with Bitcoin Mining Rewards.
Bitcoin Mining Reward
The mining reward is received by miners when they successfully mine a coin or crypto. Until now, a large majority of Bitcoin has been mined and the final stage of mining the last coin is getting near. But this not completely true as bitcoin mining process changes with time. In the start when Bitcoin was introduced, the mining reward was 50 BTC.
When the first halving was done, mining reward was reduced to 25 BTC and after the second halving, it was halved to 12.5 BTC. It is assumed that in the next halving which will take place in May 2020, this reward will get halved again and will become 6.25 BTC. This will continue to take place every 4 years or when the block will reach 210,000 until the last Bitcoin mining is reached.
What happens when last Bitcoin will be Mined?
The last Bitcoin will be mined on the day when its maximum capital will hit the market. After that, there will be no more Bitcoins left to be mined and hence, miners will not receive any more BTC as mining rewards. But miners will have another option to get rewarded with BTC and that is in the form of Transaction fees.
Validation of Bitcoin transactions and storing them on the blockchain network will always take place. Once there will be no Bitcoins left for mining, bitcoin transaction fees will be the only source of income for miners. Miners can actively participate in validating new transactions. Every bitcoin transaction has a transaction fee associated with it. So, by validating transactions, miners can always earn BTC as a fee.
Presently, transaction fees are approx hundred dollars per block, but it has the potential of increasing to thousands of dollars per block. The fee is expected to grow until the number of transactions on the blockchain network will keep rising together with Bitcoin prices.
In the end, we can say that after the mining reward goes away, miners can still earn through transaction fees. It will become their sole source of earning income from Bitcoin. This makes it advisable for the miners to gradually start adapting and practising validating transactions so that they can earn profits from mined Bitcoins. Plus, the miners could always switch to investing or become traders. If you want to opt for starting your own trading business, you can connect with www.pcex.io and opt for its unique franchise model for earning higher returns.
Bitcoin Halving took place on 11, May 2020 around 4 PM EST. The mining rewards for Bitcoin miners were cut in half to 6.25 BTC.