There can only ever be 21,000,000 Bitcoin.
At first the prize (aka the “block reward”) for a miner solving a hash was 50 Bitcoin. But the way Bitcoin’s blockchain works, the block reward is cut in half after every 210,000 blocks are solved.
After the final 6,930,000th block, there will be no new Bitcoin created. But the network doesn’t just stay secure if no one works on it… The mining has to happen… or Bitcoin disappears.
What will the rewards be then to secure the network?
Bitcoin Halving Dates
Bitcoin was created on Friday, January 9th, 2009 at 17:05:49 -8:00 by Satoshi Nakamoto…
On November 2012, the block reward was cut in half for the first time.
It went to from 50 Bitcoin to 25.
It was cut in half again back in July 2016… And now the reward is 12.5 Bitcoin.
Profiting from Bitcoin has become a cryptomining frenzy and a race among powerful miners and cloud mining syndicates.
As the cryptomining continues, the block reward will be cut in half again to 6.25 Bitcoin around 2020, according to “BitcoinBlockHalf.com“.
“Next Reward-Drop ETA date: 02 Jun 2020 02:37:13 – According to BitcoinBlockHalf”
Then, sometime in 2024, the reward will go to 3.125 Bitcoin…
When Will Miners Be Disincentivized to Continue Cryptomining?
But as the reward for cryptomining decreases, electricity costs continue to rise, mining becomes even more competitive and pools gain even more economy of scale (almost according to a power law)…
Will it still be worth it for miners to mine Bitcoin?
What will happen if Bitcoin’s price is still hovering between $10,000-$20,000?
Bitcoin users must pay a fee when sending a transaction on the network.
Right now, these fees are small, but they have been increasing.
It is expected that Bitcoin transaction fees will become larger over time and will make up for the decreasing block reward.
Maybe transaction fees will have the effect of spreading the wealth around more evenly among miners…? Who knows? Perhaps Satoshi knows:
“In a few decades when the reward gets too small, the transaction fee will become the main compensation for nodes. I’m sure that in 20 years there will either be very large transaction volume or no volume.” – Satoshi Nakamoto
It is expected that the final halving won’t occur for over 100 years.
If Cryptomining Stops, Bitcoin Disappears
But Bitcoin investors better hope that the transaction fees associated from transferring and transacting Bitcoins is enough of an incentive.
According to the book The End of Money, a crucial point is that cryptography is used only to secure the blockchain via proof-of-work.
If that cryptography-generating mining stopped, every coin in circulation would cease to exist.