EDUCATION MARKETS SIMULATOR YOUR MONEY ADVISORS ACADEMY

CRYPTOCURRENCY BITCOIN

Guide to
Bitcoin What Happens to Bitcoin
BITCOIN BASICS After All 21 Million Are
BITCOIN MINING
Mined?
Bitcoin Mining, Explained

Is Bitcoin Mining Still Profitable?

What Happens to Bitcoin After All

Are Mined?
By ADAM HAYES | Reviewed by KHADIJA KHARTIT | Updated Feb 28, 2021
Mining Pool

How to Choose a Cryptocurrency TABLE OF CONTENTS

Mining Pool
The Supply of Bitcoin Is Limit… Bitcoin Mining Rewards
Effects of Finite Bitcoin Supply Special Considerations
HOW TO STORE BITCOIN

BITCOIN EXCHANGES
Bitcoin is like digital gold in many ways. Like gold, bitcoin cannot simply be
BITCOIN ADVANTAGES AND created arbitrarily; it requires work to "extract." While gold must be
DISADVANTAGES
extracted from the physical earth, bitcoin must be "mined" via
BITCOIN VS. OTHER
computational means.
CRYPTOCURRENCIES
Bitcoin also has a stipulation—set forth in its source code—that it must
BITCOIN VALUE AND PRICE
have a limited and finite supply. For this reason, there will only ever be 21
million bitcoins ever produced. On average, these bitcoins are introduced
to the Bitcoin supply at a fixed rate of one block every ten minutes. In
addition, the number of bitcoins released in each of these aforementioned
blocks is reduced by 50% every four years.

KEY TAKEAWAYS
There are only 21 million bitcoins that can be mined in total.
Once bitcoin miners have unlocked all the bitcoins, the planet's
supply will essentially be tapped out.
As of February 24, 2021, 18.638 million bitcoins have been mined,
which leaves 2.362 million yet to be introduced into circulation.
Once all Bitcoin has been mined the miners will still be
incentivized to process transactions with fees.

The Supply of Bitcoin Is Limited to 21 Million

In fact, there are only 21 million bitcoins that can be mined in total. [1]
Once miners have unlocked this number of bitcoins, the supply will be
exhausted. However, it's possible that bitcoin's protocol will be changed to
allow for a larger supply. What will happen when the global supply of
bitcoin reaches its limit? This is the subject of much debate among fans of
cryptocurrency.

Currently, around 18.5 million bitcoins have been mined. This leaves less
than three million that have yet to be introduced into circulation.

Important: While there can only ever be a maximum of 21

million bitcoins, because people have lost their private keys or
have died without leaving their private key instructions to
anybody, the actual amount of available bitcoins in circulation
could actually be millions less.

Bitcoin Mining Rewards

The first 18.5 million bitcoins have been mined in the ten years since the
initial launch of the Bitcoin network. With only three million more coins to
go, it might appear like we are in the final stages of bitcoin mining. This is
true but in a limited sense. While it is true that the large majority of
bitcoins have already been mined, the timeline is more complicated than
that.

The Bitcoin mining process rewards miners with a chunk of bitcoin upon
successful verification of a block. This process adapts over time. When
bitcoin first launched, the reward was 50 bitcoins. In 2012, it halved to 25
bitcoins. In 2016, it halved again to 12.5 bitcoins. As of February 2021,
miners gain 6.25 bitcoins for every new block mined—equal to about
$294,168.75 based on February 24, 2021, value. This effectively lowers
Bitcoin's inflation rate in half every four years.

The reward will continue to halve every four years until the final bitcoin
has been mined. In actuality, the final bitcoin is unlikely to be mined until
around the year 2140. However, it's possible that the Bitcoin network
protocol will be changed between now and then.

Important: The Bitcoin mining process provides Bitcoin

rewards to miners, but the reward size is decreased periodically
to control the circulation of new tokens.

The rate that bitcoin are produced cuts in half about every four years.  Investopedia

Impacts of Finite Bitcoin Supply on Bitcoin Miners

It may seem that the group of individuals most directly affected by the
limit of the bitcoin supply will be the Bitcoin miners themselves. Some
detractors of the protocol claim that miners will be forced away from the
block rewards they receive for their work once the bitcoin supply has
reached 21 million in circulation.

But even when the last bitcoin has been produced, miners will likely
continue to actively and competitively participate and validate new
transactions. The reason is that every Bitcoin transaction has a transaction
fee attached to it.

These fees, while today representing a few hundred dollars per block,
could potentially rise to many thousands of dollars per block, especially as
the number of transactions on the blockchain grows and as the price of a
bitcoin rises. Ultimately, it will function like a closed economy, where
transaction fees are assessed much like taxes.

FAST FACT

El Salvador made Bitcoin legal tender on June 9, 2021. [2] It is

the first country to do so. The cryptocurrency can be used for
any transaction where the business can accept it. The U.S.
dollar continues to be El Salvador’s primary currency.

Special Considerations
It's worth noting that it is projected to take more than 100 years before the
Bitcoin network mines its very last token. In actuality, as the year 2140
approaches, miners will likely spend years receiving rewards that are
actually just tiny portions of the final bitcoin to be mined. The dramatic
decrease in reward size may mean that the mining process will shift
entirely well before the 2140 deadline.

It's also important to keep in mind that the bitcoin network itself is likely to
change significantly between now and then. Considering how much has
happened to Bitcoin in just a decade, new protocols, new methods of
recording and processing transactions, and any number of other factors
may impact the mining process.

The latest significant events are the Office of the Comptroller of the
Currency (OCC) letter in January 2021 authorizing the use of crypto as a
method of payment, Paypal's introduction of Bitcoin, and Tesla's
acceptance of Bitcoin to purchase Tesla cars and solar roofs. Tesla reversed
course on accepting Bitcoin in May 2021, citing environmental concerns
around the resources required to mine Bitcoin.

ARTICLE SOURCES

Related Articles
BITCOIN
What Determines the Price of 1
Bitcoin?

BITCOIN
How Does Bitcoin Mining Work?

Partner Links

CRYPTOCURRENCY STRATEGY &

EDUCATION
What Is Litecoin?

BITCOIN
How Can Bitcoins Have a
Fundamental Value?

BITCOIN
What's the Difference Between
Bitcoin and Ripple?

BITCOIN
Is Bitcoin Mining Still Profitable?

Related Terms
Bitcoin Halving: What You Need to Know
How Bitcoin's halving works and what it means for Bitcoin users. more

Genesis Block Definition

Genesis Block is the name of the first block of Bitcoin ever mined, which forms the
foundation of the entire Bitcoin trading system. more

Bitcoin Definition
Bitcoin is a digital or virtual currency created in 2009 that uses peer-to-peer
technology to facilitate instant payments. more

Bitcoin Mining
Breaking down everything you need to know about Bitcoin mining, from
blockchain and block rewards to Proof-of-Work and mining pools. more

Bitcoin Cash
Bitcoin cash is a cryptocurrency created in August 2017, arising from a fork of
Bitcoin. more

Blockchain Explained
A guide to help you understand what blockchain is and how it can be used by
industries. You've probably encountered a definition like this: “blockchain is a
distributed, decentralized, public ledger." But blockchain is easier to understand
than it sounds. more

About Us Terms of Use Dictionary

Editorial Policy Advertise News

Privacy Policy Contact Us Careers

TRUSTe California Privacy EU Privacy
Notice

# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Investopedia is part of the Dotdash publishing family.