Bitcoin is a lot like gold. Like gold, Bitcoin cannot simply be created arbitrarily. Gold must be mined from underground, and cryptocurrency must be mined digitally. Related to this process is a condition stated by the founders of Bitcoin that, like gold, cryptocurrency has a limited amount.
The maximum amount of Bitcoin is 21 million
It is known that in the world the maximum and total amount of Bitcoin that can ever exist is 21 million.
About every four years, the amount of Bitcoin that rewards the mining of the next block is halved: at first it was 50 BTC, then 25, and then 12.5. In 2020, this will be 6.25 BTC. Thus, if governments constantly increase their money supply, the Bitcoin algorithm acts in the opposite way, preventing inflation.
The next 3 million BTC will be slower to mine due to doubling block rewards that occur every 210,000 blocks (or about four years), and will reduce the supply of new Bitcoin by 50 percent.
Currently, 18,023,662.5 Bitcoins are mined. This number changes approximately every 10 minutes when developing new blocks. Right now, every new block adds 12.5 Bitcoin to circulation.
The latest Bitcoin is expected to be mined in 2140.
The consequences of mining all Bitcoin coins
What happens when the entire 21 million Bitcoin is received? Will the system stop working, because miners will no longer receive rewards for closing blocks? But the fact is that miners also receive commissions for processing transactions, and these incomes will not go anywhere.
When the latest Bitcoin is still mined, this does not mean that the network will collapse. In addition to the premiums for computing hashes, miners receive transaction processing fees. Now these fees are small, about a fraction of a percent, but as the fee for calculating new blocks decreases, the amount of transaction processing fees is likely to grow – along with the cost of Bitcoin.
These fees should be maintained at a level that continues to motivate miners, so that although new Bitcoin will stop appearing, Bitcoin miners will still receive money.
Ability to change the amount of Bitcoin
In fact, it is possible to change the number of Bitcoin cryptocurrencies. If users in large quantities decide on such changes, for certain reasons, the system will also accept this.
Even though it is technically possible, the change of the borders of the coin will most likely not become a good news for the Bitcoin customers who value its gold-like properties. After all, the Bitcoin code has long been managed by a community inclined to preserve the original properties of the coin created by its founder, Satoshi Nakamoto.
Editor: Yuliya Soroka