Over the past five years, Bitcoin has become a popular means of payment, as well as the main cryptocurrency in the market with a dominance ratio of 59.1%. Today, articles, forums, and fashionable devices about the first cryptocurrency are no longer a novelty. But there are many secrets and guesses that are associated with this cryptocurrency.
For example, many users who are not familiar with the principles of mining Bitcoin, do not realize that the number of coins is limited and may end by 2140. In this article we will talk about how the main cryptocurrency is emitted, where the coins come from, and also what will happen when Bitcoin will become unprofitable.
Bitcoin emission – why mining is needed
What is mining? The work of each cryptocurrency, as well as its emission are supported by mining, that is, the extraction of an asset due to the computing power of the technology. Rewards for miners are calculated after getting each block in the blockchain. Thanks to such rewards: the issue of coins is supported, as well as the work of the whole network. Simply put, cryptocurrency mining is a process necessary for creating coins and ensuring network operation.
It is important to understand that if the cryptocurrency were produced in unlimited quantities, inflation would have been expected. In order to avoid the sad scenario, the following principles were introduced: cryptocurrency halving (reducing remuneration), mining complexity (the more miners, the harder it is to get) and limited emissions.
Separately about Bitcoin: a total of 21 million Bitcoins can be produced. Thanks to halving, remuneration reduction, mining cryptocurrency and network support stretched to 2140. Moreover, if the price of Bitcoin will not grow, then by reducing the remuneration (every 4 years, it will be halved), digital gold will be unprofitable and unprofitable to mine.
When will Bitcoin end?
As mentioned above, the Bitcoin issue will end in 2140. Then the system will cease to reward miners and increase the number of existing Bitcoins. It is important to bear in mind that if there are no miners, the blockchain system will not be able to work. That is, it will be impossible to transfer Bitcoins, because there will be no one to enter information about transactions, as well as confirm the transfer to the blockchain.
The first transaction from the Bitcoin network was made on January 21, 2009. Then the unknown creator of the cryptocurrency formed the Genesis block and limited the number of extracted BTC.
What will happen when Bitcoins end? Scenarios
There are several alternatives for what happens to the main cryptocurrency network when its mining is over. Below we consider the possible scenarios of the event.
So, the year 2140 ... Bitcoin emission has ended and it is not profitable for miners to maintain the network operability.
Scenario number 1. Alternative cryptocurrencies
Humanity can switch to other cryptocurrencies, and Bitcoin, after completing its mission, will be left behind. For example, today there are cryptocurrencies with unlimited emissions (Binance Coin), which are saved from inflation by quarterly burning. That is, asset developers buy back some of the coins and destroy them to avoid inflation.
If, until the end of the release of Bitcoins, the cryptocurrency economy does not cease to develop, then it is likely that among the alternative crypto there will be leaders who will replace the BTC.
Scenario number 2 Miners-volunteers
There may be other incentive schemes for miners. So, for example, there were assumptions on the creation of a specialized remuneration fund or a hypothesis about a general agreement between miners. In the case of the latter, due to unprofitability, the complexity of mining will fall sharply. This means that in order to maintain the network’s performance, it will not be necessary to acquire expensive and energy-intensive devices for computing. And keeping Bitcoin afloat will be possible with just a few machines or farms.
Scenario number 3 New technologies
Not a fact, but it is assumed that by the time Bitcoins are released, new technologies will already appear that will be able to upgrade the network. At the moment, many Bitcoin coins are irretrievably lost (a little less than half). It is possible that there are options for their return and network support at their expense.
In fact, it is not at all clear what will happen in the year 2140. And do not plan for such a distant time. Today, Bitcoin recovers its value. The course finally regained its former position and exceeded the border of 10,000 US dollars.
Editor: Godfrid Brower