Bitcoin shares its nature and existence with several other naturally occurring metals. Take diamonds, for example, they don’t just appear, they require a lot of effort for them to be extracted. In the same way, Bitcoin requires immense power to be extracted. The extraction process is however different in bitcoin from natural resources; Bitcoin is mined.
As is inputted in the source code of its creation, Bitcoin must have a definite amount suppliable. For this reason, there is only 21 million Bitcoin in existence.
Averagely, these Bitcoins are added at a rate of one block every ten minutes to the existing supply. However, the number is cut by 50% in every four years. The available number of Bitcoin can be exhausted if all of it is completely mined, once this happens, the supply will end. However, the operating principles of the currency can change for more bitcoin injection.
Over the years, a large percentage of Bitcoin has been mined and integrated into society. About 18.7 million is the total number of Bitcoin currently in circulation, which leaves over 2 million Bitcoin that is currently untouched.
The 18.7 million Bitcoin that has been mined took over a decade of mining to achieve. Bitcoin’s supply is reaching its final days. However, the timeline for the exhaustion of this supply is a little more complex than the time measurement for the last decade might imply.
The rewarding process for miners is that they get a piece after they have successfully verified a block of Bitcoin. One of the things that keep it at the top of the list of cryptocurrencies, besides its longevity is its adaptation.
In the early days of mining, around 2012, miners were rewarded as high as 50 Bitcoin after verification of a block. This number has drastically changed over the years. By 2016, the number was cut in half. As of February of 2021, after successfully verifying a block, miners get 6.25 Bitcoin.
This process essentially cuts the coin’s inflation rate by half every 4 years. This is exactly how the miners’ rewards will continue to reduce with the coming years. As a result of this, it is unlikely that the last Bitcoin can be mined earlier than 2125. Although, there is a chance that the operation principles of the currency are changed before that time.
The effects of the supply chain being cut off seem like it’s the miners that will be most affected, however, this is not solid. Even after all the Bitcoin has been mined, miners will continue transaction and block verifications.
This is because they still get to earn a fee upon every successful Bitcoin transaction they carry out. This is what happens in the background while trading on bitcoincodeapp.io. Currently, these fees are not a lot as it is only a few hundred dollars for each successful transaction.
However, the potential for these fees to rise is on the high side. This is because of the increasing rate of adoption of the coin and as a result, more transactions are constantly happening in the space. They could reach as high as thousands of dollars in the coming years, as the price of Bitcoin is also a major factor to be considered.
Current projections on the exhaustion time of Bitcoins supply are still about 100 years from now, as the reward drastically decreases as the amount decreases.
The implication of this slow rate of exhaustion is a pointer to the fact that its operation protocols are bound to change before it is completely mined. Also, with its growing rate of acceptance from major corporations like PayPal, it is evident that this powerful currency is still going to be around for a while.