What happens if all Bitcoins are mined?
What happens if all Bitcoins are mined?
What happens if all Bitcoins are mined – this is a common question asked by investors and experts. Because the system of cryptocurrency is characterized by uncertainty and a lack of understanding due to its young age, no one can provide a definitive answer or speculate without considering a number of variables.
In order to tackle the question as thoroughly as possible, it’s important to understand the principle and fundamentals of Bitcoin. Based on the limited number of available Bitcoins, mining will eventually come to an end, specifically when 21 million Bitcoins is reached.
According to experts, this will be the case around the year 2140, assuming everything goes as predicted. Until then, another increase in value is to be expected. The generation that is currently investing in mining will not be alive to see it end, however.
Still, the question remains and investors and potential investors want to know what the future holds.
The fact is, nobody can predict with certainty what exactly would happen because that moment is too far into the future to make a reliable forecast. When it comes to Bitcoin, possible scenarios, such as government regulation, have to be considered.
It may also be that by 2140, the international political climate will have changed dramatically. The conditions for reaching the final number of 21 million are a strong and consistent power supply and political stability.
There are several scenarios that are conceivable but should not be relied on because of the unpredictable nature of cryptocurrency in its infancy. Therefore, many mining investors see their investment as a short-to-medium-term strategy and think no more than 5 years into the future.
Upon answering the question, What happens if all Bitcoins are mined, here
Scenario 1: Bitcoin behaves like gold
One possibility is that Bitcoin would be treated much like gold is. This is supported by the fact that economists already classify Bitcoin as “digital gold” today because, just like gold, Bitcoin is not used as a means of payment in everyday life, though holds a lot of value.
If Bitcoin really does share these properties, it would likely have a much higher value by 2140. Not every citizen has gold, either, the same way not everyone will have Bitcoin in the future.
Those who will ultimately have it will be the children of today's Bitcoin investors who have passed on their earnings. Even large companies in possession of Bitcoins and could then identify the value as equity. It also is possible that Bitcoin still increases in value.
This is the best case scenario for all investors and Bitcoin owners and assumes that all other cryptocurrencies will have not been able to catch up with Bitcoin's high performance.
Scenario 2: Bitcoin becomes the reserve currency
Another conceivable scenario is that Bitcoin becomes the reserve currency. This assumes that all other cryptocurrencies continue to develop strongly by 2140 and that fiat money, including the euro and the dollar, lose traction.
In this case, banks would no longer hold the power to enforce the regulations they do today because the international monetary system would effectively bypass traditional financial institutions.
In this theory, Bitcoin would assume the role of reserve currency because it will have proven to be stable for over a century.
Some experts even go so far as to predict that Bitcoin would become the world currency. On the other hand, however, there are other cryptocurrencies which are much better suited for fast payment in everyday life.
By contrast, Bitcoin as a reserve currency makes more sense, as many people familiar with Bitcoin already theorize today.
Scenario 3: Bitcoin has no value
Another possible answer to the question, What happens if all Bitcoins are mined, reaching 21 million mined Bitcoins. By that point, it would be possible that other cryptocurrencies will have risen above Bitcoin on the market—it should not be forgotten that, while Bitcoin is the best-known cryptocurrency, it’s far from perfect.
Currently, it benefits from a hype that, in 50 years time, other cryptocurrencies could most certainly create and sustain.
There are already alternative cryptocurrencies that are more promising in many aspects, especially with regard to payment transactions. Both fast and easy to implement in modern everyday life, IOTA or Stellar Lumens (XLM) are great examples of this.
Also important to consider are the increasing transaction fees that are incurred in mining. These will increase even more drastically in the future and, for many investors, could be a reason to look for alternatives soon and turn their backs on Bitcoin.