The Last Bitcoin: What Happens When All BTC Is Mined?

Satoshi Nakamoto mined the genesis block on January 3, 2009, mining the first 50 bitcoins (BTC) in history and starting a multibillion-dollar industry centered around crypto mining. However, with a limit on the supply of bitcoin, the fate of miners after the final coins are issued is unclear.

Bitcoin is created through mining, a process that uses computer hardware to solve complex math problems and verify transactions on a blockchain network. For their efforts, miners are rewarded with a predetermined amount of BTC for each transaction block.

According to the Blockchain Council, more than 19 million BTC have been awarded to miners in block rewards, and only 21 million are available according to Nakamoto’s whitepaper. Once this limit is reached, miners will no longer be rewarded for verifying transactions.

Speaking to Cointelegraph, Nick Hansen, founder and CEO of bitcoin mining company Luxor Mining, says that despite the loss of block rewards, miners will continue to play an essential role in verifying and recording transactions on the blockchain, but how they are compensated will evolve.

Currently, successfully validating a new block on the blockchain rewards miners with 6.25 BTC, which is worth about $188,381 at the time of writing, according to CoinGecko. Miners also get transaction fees.

According to Since 2010, fees and block rewards have earned miners more than $50 billion, according to calculations shared in a May 1 tweet by on-chain analytics firm Glassnode.

Hansen believes that transaction fees will eventually become the main incentive for miners to continue mining long after the last BTC has been mined.

“Therefore, as transaction fees become a significant part of the bitcoin mining economy, understanding the dynamics of transaction fees and predicting them in the future becomes even more important,” he added:

“So it is important to see fees increase over time, for example bitcoin ordinals recently helping with this.”

However, this change will take years as no one currently mining will be alive until the last BTC block reward is received.

gonna wait a long time to find out

According to Hansen, based on block detection rates and the halving process, which occurs approximately every four years – or every 210,000 transaction blocks – the last BTC will likely be mined around 2140.

The bitcoin halving is a planned cut in rewards to miners, with the next cut expected around April 2024. This reduces the reward for each block to 3,125 BTC or approximately $94,190 at the time of writing.

In theory, by limiting the supply of BTC, the value of each coin should increase when demand increases and supply remains constant.

Hansen says that the price of BTC in 2140 will depend on unpredictable factors such as market demand, regulation, technological progress, and macroeconomic factors.

“Having all the bitcoin in circulation could lead to a drawdown, but whether that drawdown translates into price growth depends on market dynamics,” he added.

“As we look to a future where all bitcoin has been mined, it is important to remember that bitcoin was designed with this endgame in mind.

“The phasing out of block rewards and changes to transaction fees are built-in to the protocol and represent a simple solution to ensure the continued security and viability of the network,” Hansen said.

Connected: Bitcoin Educator Thinks Rising BTC Transaction Fees Are a Good Thing

Jaron Mellerud, a research analyst at Hashrate Index, told Cointelegraph that as bitcoin adoption and usage increase, transaction fees will increase dramatically and become the main source of income for mining companies.

Melerud said that by the time the last BTC is released, the block subsidy will already be so low that it won’t have a significant impact on the coin supply.

“Due to the huge demand for block space relative to the scarce supply of block space, transaction costs should skyrocket in a future scenario of hyperbitcoinization,” he added.

“If you don’t believe that transaction fees will be high enough in the future to justify mining, then you really don’t believe in bitcoin.”

What about Fiat?

Until the last bitcoin is mined, Melerud believes that its value will not be measured in US dollars or other fiat currencies.

He estimates that by then fiat money systems will have collapsed and bitcoin could be its successor and become the standard unit of account around the world.

“Under such circumstances, the only valid way to measure bitcoin’s purchasing power is to see how much energy a bitcoin or a Satoshi can buy,” Melrud said.

“Just as we currently measure the purchasing power of the US dollar in terms of energy, barrels of oil,” he said.

The collapse of the fiat money system has long been predicted due to the many problems facing the traditional financial system. In late March 2023, Silicon Valley Bank collapsed due to a liquidity crisis, followed by Signature Bank and Silvergate Bank.

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Ahead of the March 2023 banking crisis, a survey conducted in February by business intelligence firm Morning Consult on behalf of crypto exchange Coinbase found that a majority of respondents were already disillusioned with the global financial system.

A large proportion of respondents are frustrated with the global financial system and want change. Source: Morning Consult

Bitcoin may not be the same in 120 years

Speaking to Cointelegraph, Pat White, co-founder and CEO of digital asset platform Bitwave, believes that miners will remain an important part of the ecosystem, but not all will survive, with some going out of business due to rising costs.

According to a March 24 report from Glassnode, miners have experienced long periods of unprofitability since 2010, with only 47% of trading days being profitable.

According to data from Glassnode, miners have already experienced long periods of unprofitability. Source: Glassnode

“I think it is conceivable that some miners will shut down or use other manipulative techniques to drive up fees,” White said.

“But I also think it will be long before the last bitcoin is mined, as the last few halvings will push block rewards down to satoshi levels.”

However, White also says that “a lot can happen in 120 years,” and that BTC could change radically over the next century.

White believes that quantum computers will likely break the core encryption underlying bitcoin by 2140, although he says that the engineers working on it have known for a long time that it is not quantum secure.

“It is not necessary that people should be scared because of this quantum security problem. Between now and 2140 bitcoin will have to undergo a major rebuilding of the encryption layer upwards,” he said.

“At that point, the bitcoin developer community will be able to assess whether we are on track for a working transaction fee-based network, or whether additional bitcoin mining is needed to ensure the security of the network,” White said.

White further speculates that Satoshi Nakamoto’s white paper states that 21 million BTC is the supply limit and the most concrete rule, none of us will live to enforce that rule until 2140.

He believes that crypto relies on encryption and consensus; Future miners could theoretically increase the BTC hardcap to more than 21 million if the community finds that the transaction fee incentive is insufficient to keep the network secure.

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What impact this might have on price is unclear, but either way, White thinks the price of bitcoin will stabilize at a global inflation-reflecting price point, and that if one or more countries seriously take it as their reserve currency there will be a big price move sometime in the next 120 years.

In that case, he says it would “probably be independent of bitcoin mining plans” and would be the most concrete time to push BTC’s price.

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“There are things we can’t even imagine could affect bitcoin — wars and energy crises, obviously — but what if by then we are a true multiplanetary species and we need to increase block production times to support solar system-level communication speeds,” White said.

“What I always think is important is to focus on the most difficult problems we face today and do what we can to solve them. That could be solutions for payments or digital assets, or banking the unbanked – these are the issues we need to focus on right now,” he said.

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