People are mining bitcoin at a very rapid speed. Most cryptocurrency mining plants have acquired thousands of mining machines to mine BTC. The white paper of BTC states that every computer can decode the cryptographic puzzle. But with ASIC miners being used at an extreme level, no other hardware can grant a profitable venture. Visit the https://bitcoin-billionaire.com/ for more information on bitcoin trading
As per reports, only cryptocurrency mining pools have contributed 70% of the hash rate on bitcoin’s public ledger. Solo miners who were making a hell of money with bitcoin mining are now struggling to get the block reward. To get a detailed guide about cryptocurrency trading, check Bitcoin Equaliser App. The database revealed that BTC had touched 90% of the entire supply. In short, the market comprises 18.9 million BTC. Bitcoin has achieved this milestone after 11 years.
The first block rewarded bitcoin miners with 50 BTCs, and this continued for almost four years until the first bitcoin halving. Cryptocurrencies resemble fiat currencies in a few manners. But some digital currencies like BTC consist of a finite supply. Here is a detailed overview of what could happen subsequently to bitcoin reaching its maximum supply.
Why a finite supply?
Assets with a finite supply tend to have a lower inflation rate and more scarcity. For example, gold has an indefinite finite supply, and the inflation rate of gold is much lesser than other fiat currencies. Moreover, gold is much scarcer than traditional currencies. Gold mining is the action that helps people extract gold out of the earth, and the people who extract this asset are the owner of that particular amount.
A similar concept goes with bitcoin; mining is an action that helps miners to avail freshly minted BTCs, and the auditors who find these freshly minted BTCs have the ownership of that particular amount. After mining, either a miner can sell their assets or hold them.
In gold mining, you need gigantic equipment, whereas, in bitcoin, you need robust mining machines. Therefore, the complication a bitcoin miner can face while mining is increased difficulty in mining action, higher cost of mining machines and large electricity consumption. In short, the finite supply of bitcoin is to lower its inflation and incline its scarcity and demand.
Impact on mining!
The scarcity of BTC will reach the next level after it reaches the maximum supply. We all know the freshly minted BTCs that miners get to verify bitcoin transactions. With bitcoin reaching its entire supply, there will be no BTC units to give miners as a reward. But miners don’t need to worry about their profitability.
As miners also get transaction fees alongside the freshly minted BTCs, transaction fees can become the new block reward. In short, the only source of revenue for bitcoin miners will be the transaction fees.
The block reward a bitcoin miner gets nowadays is much more than the incentives they will get in the future. But if the inflation rate of fiat currencies keeps booming like this, the transaction fees will also reach $1000 in the forthcoming years. So the Bitcoin network will stop giving bitcoin as a reward in 2140. But with bitcoin not remaining a block reward anymore, the profitability of bitcoin mining will reach the next level. If the transaction fees become block rewards, they will be more frequent.
How will the price shift?
The market value of bitcoin will experience dramatic changes once it reaches the maximum supply. We all know the higher scarcity of any asset leads to a higher demand most of the time. Bitcoin is already very scarce as its supply is deficient nowadays due to the great difficulty of bitcoin mining. So the demand for bitcoin is also unquestionable as everyone is just crazy about it.
In 2140, the market value of bitcoin will cross all of the all-time highs it would have touched before that. But factors like bitcoin demand and cryptocurrency regulation will also narrate the price shift in forthcoming years. For example, if Satoshi Nakamoto increases the supply of bitcoin, Satoshi Nakamoto might be the developer of bitcoin. Still, only stakeholders holding bitcoin can vote for increasing the maximum supply.
