DeutschBitcoin is limited to 21 million units – a key feature that makes the cryptocurrency unique. But what actually happens when this maximum supply is reached? In this article, we take a look at the most important facts and consequences when the last Bitcoin has been mined.
When Will the Last Bitcoin be Mined?
Forecasts suggest that the last Bitcoin will be mined around the year 2140. The reason for this lies in the so-called halving mechanism: The reward for mining a block is halved approximately every four years. This process ensures that the distribution of new Bitcoins becomes increasingly slower and asymptotically approaches zero.
Initially, the block reward was 50 BTC per block. This has been successively reduced by the first halvings and, after the 2024 halving, is currently at 3.125 BTC. The next halving is expected to take place in 2028. The halving mechanism is firmly anchored in the code of Bitcoin and contributes significantly to the deflationary nature of the cryptocurrency. The closer the time comes when no new Bitcoins are generated, the more alternative sources of income for miners come into focus.
What Does that Mean for Miners?
After reaching the limit of 21 million Bitcoins, no new block reward will be distributed. Miners will then receive their income exclusively from the transaction fees that users pay to have their transactions processed in the network. Even today, these fees account for a significant portion of the revenue for miners – in the future, they will be the sole incentive for mining.
For mining to remain economically viable even without block subsidies, the network must continue to be actively used. A high number of transactions, combined with a certain willingness of users to pay for fast and secure processing, is crucial. At the same time, miners must reduce their operating costs, for example through cheaper electricity prices, more efficient hardware, or the relocation of their infrastructure to regions with better framework conditions.
Important requirements for miners after 2140:
- Sufficient transaction volume in the network
- Market acceptance for transaction fees
- Efficient mining technology and favorable operating costs
Effects on the Bitcoin Network
A) Security of the Network
The Bitcoin network is based on the proof-of-work mechanism, in which miners generate new blocks and validate transactions through high computing power. If the incentive through new coins is eliminated, mining could become unattractive for some players. The consequence would be a decreasing hash rate, i.e. the total computing power in the network. A lower hash rate, in turn, could theoretically impair the security of the network, as attacks would be easier to carry out.
However, it is also conceivable that rising transaction fees or a continued high Bitcoin price will keep mining profitable. This could be enough to maintain the necessary security and network integrity.
b) Transaction fees
The dependence on transaction fees will increase significantly in the future. If fewer miners participate in the network, the supply of processing power could decrease. This would mean that users would have to be willing to pay higher fees to have their transactions treated preferentially. At the same time, an increasing use of the network would also lead to greater competition for block space, which could further increase fees.
c) Deflationary character
Due to the fixed upper limit, Bitcoin will be a purely deflationary asset in the future. New units will no longer come into circulation. Should the demand for Bitcoin continue to rise, this could lead to a sustained price increase. At the same time, the deflationary character could lead to many users preferring to hold their coins rather than spend them – in the expectation that the value will continue to rise. This could possibly have a negative impact on the transaction volume and thus on the income of the miners.
Technological and Structural Adjustments
To meet the challenges, developers are relying on various technological approaches. A particularly promising one is the Lightning Network. This layer 2 solution makes it possible to process transactions outside the main blockchain, which significantly increases speed and scalability. At the same time, the costs for users remain low, which could further promote acceptance.
Efficiency in mining also plays an important role. Advances in hardware development, the use of renewable energies and the optimization of data centers are already central topics today. It can be assumed that these developments will continue in the long term in order to keep mining profitable despite falling rewards.
In addition, there could be discussions within the Bitcoin community in the future as to whether fundamental protocol adjustments are necessary. New incentive models or alternative consensus mechanisms would be conceivable, for example. However, since changes to the Bitcoin protocol have to overcome high hurdles and require broad approval, this is only to be expected in the long term.
Technological factors of great importance:
- Further development of ASIC mining hardware
- Use of sustainable energy sources
- Scaling through off-chain solutions such as Lightning Network
Social and Economic Implications
The idea that Bitcoin will one day no longer be inflationary has far-reaching consequences. Its scarcity could make it a digital counterpart to gold – a long-term store of value in times of growing economic uncertainty. Especially in countries with unstable currency systems, Bitcoin is already being used today as an alternative to the classic banking system. This trend could intensify if the supply of coins is fixed.
States and governments will also have to deal with this new reality. Tax issues, integration into the financial system and regulatory frameworks will be more important than ever. The more Bitcoin is anchored in everyday life and in the institutional world, the more urgent clear legal foundations become.
Conclusion: the End is not a Standstill
The end of Bitcoin mining in 2140 does not mean the end of the Bitcoin network. Rather, a new phase begins in which the structure of incentives shifts. Transaction fees replace block subsidies. The stability of the network will depend on whether enough users are willing to pay for the benefits of the network – and whether miners continue to find enough motivation to secure the network through technological advances and market mechanisms.
In summary: Bitcoin remains a long-term project characterized by its forward-looking architecture and the adaptability of its community. Even after the year 2140, Bitcoin will not disappear, but will continue to evolve in a modified form. Even if we readers will probably not experience the year 2140 anymore. 😉
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