What will happen when all the bitcoins have been mined?

Bitcoin mined

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What will the miners do once all the bitcoins have been issued? How will they earn a living and what will incentivize them to keep the network secure? The short answer is: transaction fees.

More than 83% of the bitcoins that will ever exist have already been issued and are in circulation. More than 99% will be in circulation by 2040 and the last 1% will be mined around 2140. So what happens when all have already been mined? The question arises from the limited supply of the cryptocurrency: One of its key features is its finite supply of 21 million units. This means that it is totally impossible to print or create from scratch as a fiat/fiat currency.

The scarcity of bitcoin is also one of the characteristics that make it valuable. However, as the security of the network is supported by a community of miners whose incentive is the reward for closing blocks of transactions, many people wonder what will happen when all the bitcoins have been mined and the incentive is gone.

What will happen when all the bitcoins have been mined?

Currently, miners receive a reward6.25 bitcoins when a new block is created, and they charge transaction fees (a fee for processing operations). This reward incentivizes miners to behave properly and protect the network. Once all the bitcoins have been mined, and miners have to rely only on transaction fees, will that be enough to keep trading? If not, could it lead to a contraction of miners that would centralize and potentially collapse the network? The answer is a categorical no.

By 2030, transaction fees will start to represent a much higher share of the global reward. Once the fees represent more than 50%, the miners will transition and align their business model with the profitability of TX fees rather than the task of mining BTC.

Will transaction fees be enough to incentivize miners?

The answer to that question is that no one is completely sure how things will play out. However, there is enough evidence to suggest that yes, the transaction fees will be enough to keep the miners and therefore the bitcoin network going.

After all, as the value of bitcoin increases, so do the fees.

Transaction fees also gain value (measured in dollars) over time.

As BTC will go up in value over the years, so will the fees. This will make it economically viable for the miners to continue securing the network.

The change to depend on transaction fees will not happen overnight. There are many factors that can lead to further variations, giving miners enough time to adjust to the new model and for the bitcoin network to remain secure.