Out of the total number of bitcoins that would ever exist to come into circulation, 90 per cent of it has already been mined, according to the data from crypto tracker Blockchain.com. Bitcoin mining had started on January 3, 2009, with 50 bitcoins. As of December 11, 2021, total coins mined stood at 18.89 million – 89.9 per cent of the limited and pre-defined supply of 21 million in the Bitcoin protocol. While 90 per cent was mined in nearly 13 years, the rest 10 per cent is likely to take another 119 years, according to multiple reports and projections. That’s because of bitcoin halving.
“This number (year 2140) was arrived at taking into consideration the average time taken to verify and create blocks, which is supposed to be 10 minutes. So, every 10 minutes, a certain number of bitcoins are introduced into the supply, but this supply is designed to be reduced by 50 per cent every four years (known as Bitcoin halving). What’s driving the economics behind BTC right now is the supply limitation, which makes it scarce,” Darshan Bathija, CEO & Co-Founder, Vauld told Financial Express Online.
Once all the bitcoins are mined, the underlying economics is bound to change. What miners may rely on then is the transaction fee. While bitcoin was originally conceptualised as a medium of exchange, it is more often than not used as a store of value. “This ecosystem is still developing, so its underlying narrative could undergo another transformation between now and when the last BTC is mined,” added Bathija.
According to Blockchain.com, the bitcoin reward is divided by two every 210,000 blocks, or approximately four years. Some of the bitcoins in circulation are believed to be lost forever or unspendable, for example, because of lost passwords, wrong output addresses or mistakes in the output scripts.
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“Bitcoin is estimated to be mined by early 2140, however, the mining of BTC will depend on the demand for validation and the desire to do this validation by the miners. Since the BTC mining reward keeps halving, unless the price of BTC keeps increasing, miners will not be incentivised enough to do the validation which in turn negatively affects demand,” Anshul Rustaggi, Founder, Totality Corp. told Financial Express Online.
Currently, not a lot of functionality of bitcoin has been developed on the same. However, “we are now seeing the ecosystem of developers building on top of BTC like Lightning Network. We will see more developers creating ecosystems on top of BTC as it has a large community and ready adoption. There is a possibility that we see some NFT projects developed on BTC in the near future. This will accelerate the demand for BTC validation,” added Rustaggi.
As per CoinMarketCap.com, there would be only 32 bitcoin halving events ever and after the 32nd halving, 21 million bitcoins would have been mined. So, far three halvings have taken place with the last one in May 2020 and the next likely in 2024. “When all the BTC is mined, the price will then keep going up. Researchers say it can touch 200-300k per dollar,” Nitish Sharma, Global CEO, TP Global FX told Financial Express Online. Bitcoin was currently trading at $48,681, down from over $68,000 as of November 10, 2021, as per data from CoinMarketCap.com.
This story was updated with comments from Totality Corp. The suggestions/recommendations around cryptocurrencies in this story are by the respective commentator. Financial Express Online does not bear any responsibility for their advice. Please consult your financial advisor before dealing/investing in cryptocurrencies.