When Bitcoin (BTC) was created by Satoshi Nakamoto, the report represented a scientific method of distributing mined Bitcoins via blocks at set intervals every four years, the BTC rewards at every interval are cut in half — a method that sticks to schedule till all Bitcoins are mined.
Satoshi places the laborious cap of Bitcoin at twenty-one million BTC. If everything is as planned, it’ll take miners one hundred twenty additional years to mine all BTC that may ever exist, that is that the year 2140. The question now is, what happens to miners and the crypto world after that?
Miners are an integral part of the Bitcoin ecology as they mine the cryptocurrency through high-powered machines. The mining process comprises solving mathematical problems tough for people and even computers to solve instantly. Therefore, there is really the need for high-powered GPUs or mining rigs (as we call it in our crypto lingo) to do it. Some pool together their mining rigs to create Bitcoin Mining Pools. The process involves tough work and luck, analogous to how gold miners need to do a lot of work and be lucky to mine the metal.
When an individual starts a Bitcoin transaction, it must be confirmed by miners and included in a block before it pushes through. The block is then added to a public record called the blockchain. When miners add a new block, they need to make sure the transaction is accurate, and that Bitcoin is not duplicated. Miners get block rewards or transaction fees as payment for securing the network and facilitating the transaction.
Bitcoin mining has costs such as the expense used for electricity running mining rigs which can cause the miner an arm and a leg. Miners have to sell Bitcoin to cover this cost and ultimately decide whether the cryptocurrency they receive from the block rewards and transaction fees will be enough to cover the expenses.
Nevertheless, as mentioned earlier in this article, there will only be 21 million bitcoins in existence. From that, 18.4 million BTC has been mined already. Miners collectively receive 900 BTC per day and earn 30-50 BTC in transaction fees. By 2140, there will be no more reward for mining Bitcoin because there’s no more Bitcoin to mine. The Bitcoin network must ultimately be secured by transaction fees.
If Bitcoin implementation occurs, there will be a lot more transactions than the current backlog. Thus, the need for more miners to approve transactions and secure the network will increase intensely as well. This will result in a probable increase in transaction fees. This had happened before, in December 2017, when Bitcoin’s price soared to near $20,000. At that time, transaction fees spiked to $1,495 per day.
Logically, users will be discouraged to spend Bitcoin if transaction fees are high. This creates a Catch-22 situation for users and miners.
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