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How Many Bitcoins are There to be Mined?

how many bitcoin are there to be mined

October 8, 2021 | 

2105 Views | 

Jesus Guzman | 

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Bitcoin, which was the first to be introduced, is currently the most popular cryptocurrency. Its introduction also opened the doors for mining other cryptocurrencies, of which there are now over 5000. Anyone who follows the world of cryptocurrencies closely knows that only 21 million Bitcoins can be mined.

How many Bitcoins are in circulation in 2021? In February 2021, there were 18.638 million Bitcoins in circulation. So there are 2.362 million bitcoins left to mine. Many questions revolve around the number of Bitcoins that should be in circulation, how many there are and what happens when mining is exhausted.

How many bitcoins are there to be mined, and why

Why is there a cap on the number of Bitcoins that should be in circulation? The reasons behind the founder's decision to cap the number of cryptocurrencies at 21 million are not known, but there are other reasons that are considered valid.

The limitation of supply is based on the principle of finite supply. The finite or scarcity principle works in such a way that there is a limited supply of goods and a high demand for them. This theory suggests an imbalance between supply and demand that affects the price of the good.

Limiting the supply of Bitcoins causes the cryptocurrency to increase in value over time. Limiting the supply of cryptocurrencies slows the rate at which Bitcoin is brought to market.

Limiting also adds significantly to the legitimacy of a digital currency. It is also worth noting that it creates scarcity, which is a characteristic of coins. If miners could produce as many cryptos as they wanted, they would no longer have any value.

How is the bitcoins cap of 21 million reached?

If it can be prescribed how many bitcoins there should be, then it means that there is also a structure to ensure that this is achieved.

In order to have only 21 million bitcoins, a mining system called halving is introduced. Halving is where the generation of bitcoins is reduced by half. Note that this applies to all 210000 Bitcoins that are mined. Mining takes place every four years, so the number of bitcoins generated every four years is halved.

This continues until all 21 million bitcoins have been mined. It is also important for traders to understand that the system has an impact on the crypto market and Bitcoin in particular. When a halving takes place, it means there is less supply in the market. This leads to turbulence that affects the price of the cryptocurrency.

When will bitcoin mining stop?

If you know how many Bitcoins are in circulation and how many still need to be mined to reach the 21 million mark, you can predict when mining will stop. It is predicted that the last Bitcoins will be mined in 2140.

By then, the value of the cryptocurrency will have increased significantly.

What will happen when all 21 million Bitcoins have been mined?

At some point, the limit of 21 million will be reached. The big question is: What happens after that?

1. The miners will no longer receive block rewards.

Bitcoin miners will receive rewards for each valid block they mine. Note that the Block Rewards miners receive change every four years and are reduced by half.

Once all 21 million Bitcoins have been circulated, no more mining will take place. This simply means that miners will no longer receive these rewards. However, they will continue to earn money. And they will do so through the transaction fees they collect from each confirmed transaction. Their job is mainly to ensure the security of the network, as this is the source of their income.

2. Impact on transactions

How many rewards miners receive depends on the transaction fees paid. Miners receive higher rewards for transactions with higher fees. What does this mean for you? Miners might start prioritizing transactions according to the fees they attract.

The transactions with higher fees are executed faster than those with lower fees.

3. The bitcoin price will rise

The halving is already causing turbulence in the market, leading to an increase in the value of the cryptocurrency. The finite principle applied leads to low supply compared to demand, which influences the price.

When the price of the cryptocurrency rises, miners also receive higher transaction fees.

4. Investors could be motivated to show interest in cryptocurrencies.

Once bitcoin mining stops, there will be scarcity. Scarcity means an increase in the value of the cryptocurrency. The possible dramatic price increase will attract investors.

How many bitcoins are there to be mined?

Special considerations:

The current bitcoin protocols make it almost possible for us to predict where bitcoin will be in the next few years and what the market will look like. Note, however, that this is in a perfect world. A lot can still happen on the way there.

Once mining stops, there will be a shortage, which could lead to an increase in the price of the cryptocurrency. Also, miners will no longer get the incentives they get for their work. However, this does not mean that they will no longer earn anything.

They receive incentives from the transaction fees, which could also become higher if the price of the cryptocurrency rises.

Although this could be the case, a lot can change. Remember, a lot has happened between the launch of Bitcoin and today. The same could happen. The answer to the question of how many Bitcoins there should be could change. The existing Bitcoin protocols could be changed so that more Bitcoins can be mined.

The other possibility is that Bitcoin will rely on transaction fees. If this happens, the value of the cryptocurrency would fall. For the same reason, crypto could become a deflationary currency. How will this happen?

Mining activity supports the inflation of the currency. Once mining stops, this too could stop and inflation will be halted. A lot can happen between now and 2140. Keep an eye on the blockchain.

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