22 January 2021
Bitcoin was introduced in the year 2009 by an anonymous person who is named Satoshi Nakamoto. The cryptocurrency is backed by blockchain technology and there are a total number of 21 million Bitcoin that can be mined and would ever be in circulation so it is a limited supply in the crypto market. At present, approximately 18, 595, 975 has been mined and the number of bitcoin in circulation continues growing while Bitcoin halving takes place every four years. So we could say that we are almost living in the end era of Bitcoin mining out of which bitcoin are truly in circulation or are lost in the system.
The question that comes to mind is what happens when all this bitcoin expires? As when the bitcoin expires, there would not be any bitcoin to mine for the miners. Since there would not be any bitcoin to mine there would not be rewards for the miners. So what happens then? Will Bitcoin turn from being a decentralized system to a centralized system or will it come to an end?
In this blog, we are going to discuss What happens to Bitcoin when it expires?
Miner plays an integral role in Bitcoin mining and validating the transactions to verify and add them in the blockchain. However, when it comes to validating the transaction, the miners receive a fee that is paid by the sender of the transaction. The higher the fees the likely the chance for the transaction to be quickly confirmed. It is hence stated that the ultimate idea of Satoshi Nakamoto was to create an environment wherein at the end of it all, the miners would receive their incentive from the transaction fees.
Also in a way, bitcoin which was meant to be decentralized seems centralized now because of the various platform that plays their major part in bitcoin mining setup. For instance, BitDeer is a computing power-sharing platform that facilitates a full range of cloud mining solutions such as mining equipment, transport logistics, power management, operation of the mining, maintenance of the mining farms, and so forth. In the process the user has to purchase any of the computing power plans, then BitDeer will share its computing power which directs to the payouts from the mining pools and the user receives its earnings. The platform has over 5 million users, an 80% return user rate while it has an output of over 100 BTC a day.
These are some good numbers coming from just one platform, wherein many such platforms facilitate the stated services. Even though these platforms are guiding the mining pools and seem like a central outsource, Bitcoin has still managed to keep its authenticity.
Also Read, When all the Bitcoin is mined — What next?
So what next?
Bitcoin is limited in supply, so yes, the miners will not receive its rewards from bitcoin mining but the other side of the coin is that the miners can continue to validate the transaction to add in the blockchain and earn their incentives from the transaction fees.
Every block that is added in the blockchain is worth approximately a few hundred dollars which is also impacted by various factors such as the demand and supply of the coin, its reputation in the market, market price, competing cryptocurrencies, and so forth. Ultimately, as long as the transactions are happening, miners can always earn their part!
The thought is the end of the Bitcoin would be determined whether the people are using Bitcoin for transactions and for the miners to continue to confirm the transactions. So as long as the process continues - Bitcoin will function.
The one thing that would hassle the Bitcoin functioning would be its scalability. For Bitcoin to take the peak then it would require billions of transactions a year.
As studied by the crypto intellectuals, the last Bitcoin expected to be mined is in 2140 which is more than 100 years away. But bitcoin halving gradually happens every 4 years, so the end source incentive for the miners would be the portion that they would receive from Bitcoin halving which continues to lessen, and from the transaction fees.
As the result, Bitcoin will only thrive to survive than expire would be based on its demand and supply, the popularity of the digital currency, and if people would sight it as a value worth.