What percentage of Bitcoin has been mined?

Bitcoin’s acceptance and use is growing. Despite the excitement of data experts and journalists, even among those who trade cryptocurrency, few predicted Bitcoin’s extraordinary rise in 2021. This pattern is unlikely to change very soon. So far, more than 19 million bitcoins have been mined.

What happens when all the bitcoins have been mined is one of the most perplexing issues. With less than two million bitcoins now in circulation, it’s easy to see why this is such a significant problem. This page covers what happens after the final bitcoin is mined.

How Lucrative Is Bitcoin Mining Right Now?

There are around 19.07 million bitcoins in circulation as of June 2022. This indicates that more than 90% of all bitcoins have been mined, with only 1.92 million bitcoins still to be found. The total number of bitcoins in circulation was set at 21 million when Satoshi Nakamoto founded Bitcoin in 2008. Limiting the number of bitcoins that could be created helped ensure that the currency never experienced inflation. Because bitcoins, like paper money, are intended for use in transactions, an oversupply can cause significant price fluctuations.

Due to supply and price fluctuations, Bitcoins creator set a limit of 21 million bitcoins

One proposal to retain control was to release bitcoins in stages rather than all 21 million at once. To do this, the bitcoin code was created to limit the number of bitcoins that can be mined each year until all 21 million bitcoins are gone.

Bitcoin mining uses a complicated algorithm to guarantee system stability by enforcing a 10-minute time limit for discovering new blocks, after which newly mined bitcoins enter circulation and are added to the blockchain. The network automatically changes the bitcoin mining difficulty every 2,016 blocks, or roughly every two weeks, depending on whether the number of miners has gone up or down. This is done to keep the blocking time at approx. 10 minutes.

Bitcoin halving

To ensure a stable supply of bitcoins, Satoshi Nakamoto created the idea of ​​”halving”. As a result of this process, the bitcoin supply is roughly halved every three years and nine months. If the current rate of production continues, all 21 million bitcoins will have been mined by 2078. That is, there will no longer be any bitcoins to mine.

What happens when all bitcoins are mined? This is a question that has generated much debate. When you search for the answer on Google, you will find that the year 2040 is suggested instead of 2078. This is partly due to unofficial research showing that the halving happens every four years instead of every three years and nine months. If the current halving pattern remains the same and nothing else changes, the maximum number of bitcoins will be mined around 2078.

In March or April 2024, the protocol expects to repeat the halving, reducing the block reward to 3,125 BTC. However, keep in mind that not all bitcoins issued so far are in circulation, reducing the total number of bitcoins in circulation at any given time. Due to various issues, the number of bitcoins in circulation does not match the number of bitcoins created.

The way Bitcoin is stored is a crucial concern. Because wallets and passwords are required to use Bitcoin, if the owner passes away, no one will be able to access the bitcoins held in the wallet. Other mistakes made by the owners can cause Bitcoin to become unreachable indefinitely. Unlike other assets, Bitcoin cannot be retrieved without the owner’s permission.

According to a recent “New York Times” survey, more than 20% of bitcoins are held in cold wallets. These stranded bitcoins are worth approximately $140 billion. For the foreseeable future, these bitcoins cannot be used for transactions, which will reduce the number of bitcoins that can be used.

If you are ever asked how many bitcoins are in circulation, the simple answer is to subtract the number of bitcoins locked away in untraceable wallets from the total amount of bitcoins in circulation, which is currently around 19 million.

The final sum

Even if there were no stranded bitcoins, it is technically impossible to reach a total of 21 million once all bitcoins are mined. The actual amount will be very close to Bitcoin’s maximum supply. This is due to the fact that the exact number of bitcoins in circulation is never revealed. In contrast, the Bitcoin algorithm truncates decimals to the nearest whole number. As a result, the value of 6 reflects a supply of 6.2589 bitcoins.

One bitcoin is equal to 100 satoshis. Satoshis are the smallest Bitcoin units, equal to one hundred millionth of a bitcoin. Due to smaller units and rounding numbers, analysts predict that instead of 21 million bitcoins, the maximum supply will be limited to 20,999,999.

Is Bitcoin Limited?

In the absence of stakeholder action, the total number of bitcoins and the maximum number of bitcoins available for mining will remain unchanged. Satoshi Nakamoto created Bitcoin as a free and open source project. If stakeholders agree to change the code, anyone concerned about the potential consequences after all bitcoins have been mined can raise the bitcoin limit. Regardless of why the change is made, the possible outcomes are highly debated and controversial.

Reasons to expand Bitcoin supply in general

The huge financial incentive that awaits the miners who can extract the most bitcoins from the network is the main reason for bitcoin mining’s appeal. Miners are paid a portion of the bitcoin supply periodically (block rewards). In addition to bitcoin, miners receive a share of the transaction fees earned from each successfully processed block.

At the time of launch, validating a block of transactions was worth 50 bitcoins. Four years later, this dropped to 25 bitcoins, and the cycle will continue until there are no more bitcoins available.