What would happen to Bitcoin after the 21 million capacity is reached?
As you already know, gold is a limited resource. As a result, only a finite supply of gold is possible. However, we are still unaware of accurate figures on how much gold is there. Likewise, the supply of Bitcoin is also restricted. We have a clear understanding about the amount of Bitcoins that can be mined. In other words, only 21 million Bitcoins are possible to be mined. When this amount of Bitcoins is mined, we will no longer be able to engage with mining Bitcoin. In such a situation, a change needs to be implemented on the cryptocurrency network as a whole. This change should have the ability to facilitate a higher supply of Bitcoin.
According to the Bitcoin supporters, the banks are always kept in check, due to the limited supply of Bitcoin. As a result, no freedom is provided to issue fiduciary media arbitrarily. However, it is important to have a clear understanding on what would happen when the supply of 21 million is reached. Most of the investors also have this doubt in their minds.
The effect created on Bitcoin miners
First of all, it is important to take a look at the effect caused on the Bitcoin miners once the limit is reached. The Bitcoin miners are considered as the group that is most vulnerable to the limited supply of Bitcoin. In other words, the miners will not have anything to mine, once the 21 million limit of Bitcoin is reached.
Due to the limitation, Bitcoin miners will have to come across a variety of other adverse effects as well. For example, they will be kept away from the block rewards, which they receive due to the circulation of the cryptocurrency. As a result, the Bitcoin miners will have to depend on the transaction fee to maintain their operations. The Bitcoin mining process would become literally unaffordable at this time as well. This fact has been highlighted by the officials who are working for Bitcoin.com. Due to all these reasons, the number of Bitcoin miners is expected to reduce along with time. As a result, the Bitcoin network would move to become a centralized one. If it becomes a centralized one, all the people who are attached to the digital currency will have to come across negative consequences.
Will Bitcoin miners be able to remain financially sustainable?
The Bitcoin miners play a major role behind the progression of the network. However, they will find it as a difficult task to remain financially sustainable, once the 21 million limit is reached. That’s mainly because the Bitcoin miners will have to depend only on the transaction fees. On the other hand, some of the experts who are attached to the digital currency believe that we would come to a point where the mining costs and the transaction fees would break even. This is not too far from the date where the Bitcoin mining capacity reaches 21 million milestone.
If we take a look at the future, we will be able to predict that the Bitcoin mining chips would become highly efficient and small in size. This is another possibility that we can expect due to the alarming rate of development in technology. This has the ability to minimize the burden that is placed on the Bitcoin miners. As a result, Bitcoin mining is expected to become an activity as well. This activity reduces the threshold associated with the initial cost. As a result, there is a possibility for the transaction fee to increase. As a result, miners will be provided with the chance to afloat.
As we already know, the supply of Bitcoin is limited. As a result, we can only expect 21 million Bitcoins to come out. Therefore, it is important to be aware of all possible consequences, which we will have to face after the 21 million milestone is reached.