When Do We Run Out of Bitcoin? Then What?

Greetings friends. It’s been a busy last two weeks or so, but I wanted to get this out when I was able. One question people often ask other people who are at least somewhat knowledgeable about the crypto verse is “When do we run out of Bitcoin?” Quite the question. Once people realize that there’s only 21 million total bitcoins to go around (even though you can buy it within 8 decimal places of a whole coin) they start to wonder when the magic internet money will be depleted. It’s a very common question so I thought I’d answer it, but first we need to quickly discuss the process of halving.

So for every 210.000 blocks that have been minted and verified by other miners, a “halving” takes place. It is precisely as it sounds, the mining rewards are cut in half. So if a miner was previously receiving 6 whole bitcoins for solving a transaction, now they get only 3. Simple right? Well one of the interesting things in regards to that is that over 80% of the total bitcoin supply has already been mined. Certainly it won’t be too much longer before it’s all gone, right? Well, kinda.

Unless you cryogenically plan on freezing yourself in the semi-near future, the last bitcoin won’t be mined in either of our lifetimes. As of currently, 99% of all bitcoin will be mined by the year 2035. This gives us our ten year gold rush. So what happens to the last 1%? Well, the math experts put the approximate timeline the last bitcoin comes into existence being in the year 2140. Yes, about 120 years into the future! But if we’ve already mined 99% of the total supply of bitcoin by 2035, why is it going to take over a century to pull out that last 1%? Simply put, the halving cycle. Yes, that little thing we discussed in the previous paragraph continues to happen throughout the lifespan of bitcoin itself. Every four years less and less bitcoin comes into existence with every successfully mined transaction. As time goes on, miners will only receive fractions of bitcoin instead of whole coins. This is of course by design and continues to create scarcity for the grand daddy of them all, the first crypto coin ever created, Bitcoin.

So what happens after that? Do the mining machines just turn off and that’s it? Whoever has bitcoin is rich and whoever doesn’t, isn’t? Not quite, and you should still be able to buy it in most places….for a while. The miners will still be vital for the network to function. And for every transaction they complete, they’ll actually still be rewarded bitcoin. The difference will be that those broadcasting transactions to the network as the bitcoin rewards become smaller for miners, the sender will then have to pay a higher fee to make up for the smaller reward. These will simply be seen as ever increasing network fees which people pay now anyway.

However also understand by the time we reach that point of miners being rewarded with what is essentially dust, bitcoin will likely be in the 7 or even 8 figure valuation, so the reward incentive will likely still be there.

And there you have it! Not to crazy right? Pretty simple to understand. We do always have Litecoin which if a fork of the bitcoin network and is basically the silver to bitcoin’s gold status. There’s 4 times the amount and the transaction times are faster. Much like today, gold is currently worth over $3,000 whereas silver is in the $30 range. Those that couldn’t get bitcoin by then may resort to something else. Markets are weird like that.

Live well, stay healthy.