Needless to say, bitcoin is deflationary. What does that mean
Needless to say, bitcoin is deflationary. What does that mean is that mined coins are finite.
Once miners ascertain 21 million Bitcoins, that will be the total number of Bitcoins that will ever exist.
But, owing to the lost and forgotten wallets, the number of active bitcoins will be far lower than that, and there’s no way to tell the exact number.
Bitcoins can be lost because of irrecoverable passwords, forgotten wallets from when Bitcoin was worth little, from hardware failure or due to the death of the bitcoin owner.
It is highly improbable and effectively impossible for recovering lost coins.
As of March 31st, 2015, the total value of lost bitcoins was measured at about $1.23 billion USD. a more recent number from late 2016 implies that up to 25% of the circulating bitcoins are dead that would bring the measurement up to around $25 billion USD.
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When Will Bitcoin Mining Stop?
In order to fully understand when will the last bitcoin be mined, you have to check out our guide to cryptocurrency halving.
Just to give you a brief understanding, every 4 years, the amount of new bitcoin created and earned by the miners with each new block of transaction drops by half.
This is the part of bitcoin’s predictable, transparent monetary policy, that can be verified in the source code available on the Bitcoin Core GitHub repository.
At press time, we are in reward era number 3 and there is about under 3 more years to go until the block reward is lowered by half. There will be a total of 34 “reward eras.”
Originally, 50 bitcoins were earned as a reward for mining a block. Then, it dropped 25 bitcoins, and then to 12.5 bitcoins. It will drop to 6.25 bitcoins in 2020.
Thus, it can be said that if there a halving event every 4 years, the last Bitcoin should be mined sometime in the year 2140.
You May Also Read: Bitcoin History
What Will Happen When The Last Bitcoin Is Mined?
Will the entire system shut down because Bitcoins are no longer awarded for mining new blocks?
Probably Not!
Bitcoin miners are also awarded transaction fees, and these fees need to keep Bitcoin afloat. Since the bitcoin price increases, the fees allocated per transaction will also increase.
Ultimately, these transaction charges should be valuable enough that it will encourage miners to continue mining even though they will not be getting a block reward.
So while new bitcoins will cease to come into existence, the miners will still get paid. Indeed, some miners will be pushed out of the market.
However, the idea of bitcoins someday being worth $50,000 or a $100,000 is not outside the realm of the reason.
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