When Bitcoin was launched in 2009, not many were sure how it would play out. However, the world’s first cryptocurrency gained rapid success and cemented its dominance as the market leader, far ahead of its competition.
Bitcoin has now passed another significant milestone. According to market data, 90 percent of all Bitcoins set to ever enter supply have now been mined. Ahead of Bitcoin’s launch, its pseudonymous creator Satoshi Nakamoto had outlined in a white paper that there would ever be only 21 million Bitcoins. This cap on the upper limit was intended as a way to ensure the coin remains scarce and its value holds steady for years to come.
But what happens now? That 90 percent of all Bitcoins have been mined, the moot question is when will the rest 10 percent be mined? By extrapolation, what happens when all Bitcoins are mined?
While mining 90 percent of Bitcoin took only 12 years, the remaining 10 percent is expected to take 120 years. That is the 21 millionth Bitcoin will be created not before 2140. This unusually long wait for all Bitcoins to be mined is because of “Bitcoin Halving”, a pre-programmed process that cuts in half Bitcoin’s inflation rate and the rate at which new tokens enter circulation. It means every four years the reward for mining Bitcoin is halved.
In 2008, it was 50 Bitcoins but it reduced to 25 in 2012, then to 12.50 in 2016 and 6.25 in 2020 and this would drop to 3.12 Bitcoin after the next halving in 2024.
Also, not all of 21 million Bitcoins is expected to be available on the open market ever. Experts say more than 3 million Bitcoins have already been “lost” due to various reasons, including investors dying or losing their private keys.
As Bitcoin gets scarce, miners will likely become dependent on transaction fees, rather than block rewards, for their earnings. It is also likely that Bitcoin’s price may go up further as supply rate declines, but that is just a prediction and laced with risks.
Bitcoin prices have dipped in recent weeks, falling more than 25 percent over the past month.