As we all know, there are only 21 million bitcoins in total. Once mining is complete, it means that no new bitcoins will enter circulation.
So bitcoin is constantly deflationary, unlike national currencies, where legal tender is constantly issued in increments. For bitcoin, on the other hand, with a fixed total number, fewer and fewer bitcoins will keep being mined each year, and these new coins will make bitcoin more and more valuable, due to the imbalance between supply and demand, and deflation is what makes bitcoin most valuable.
While Bitcoin’s Bitcoin network will still basically run the same as it does now after all 21 million BTC have been mined, there is a difference starting to emerge for miners.
About every ten minutes, Bitcoin miners can discover a new block, and when a miner successfully solves a cryptographic puzzle, they can add the newly discovered block to the blockchain. As a reward for discovering a block, miners receive a fixed amount of bitcoins, which is called a “block reward”.
When Bitcoin was first launched, the reward was set at 50 BTC, but every 210,000 new blocks the reward was cut in half, about once every four years.
Thus, as time passes, the block rewards are reduced to 25BTC, 12.5BTC and 6.25BTC.
The third halving has now been completed, i.e. in May 2020 Bitcoin completed its third block reward, which is now only 6.25 BTC. and the next halving is expected to happen in 2024.
Miners will continue to receive block rewards until the last bitcoin is mined, but once all the bitcoins have been mined, no new bitcoins will come to market.
Over 18.69 million BTC have been mined in just ten years, which equates to 89% of the maximum supply. But, interestingly, it will take another 120 years to dig up the last bitcoin.
I. What will miners do when all the bitcoins have been mined?
Once all 21 million bitcoins have been mined, bitcoin miners will still be able to participate in the process of discovering blocks, but won’t be rewarded with blocks.
But other than that, bitcoin miners will still have other income.
In addition to block rewards, bitcoin miners will also receive all fees spent on each newly discovered block, including transactions.
Bitcoin transaction fees now represent only a small portion of miners’ income, as miners currently earn about 900 BTC (about $39.8 million) per day in block rewards, but can earn between 60 and 100 BTC ($2.6 million to $4.4 million) per day in transaction fees. This means that transaction fees currently represent at most 11% of miners’ revenue, but by 2140, they will surge to 100% of miners’ earnings.
Second, Bitcoin’s transaction fees surpassed their 2017 peak in April 2021
In December 2017 (when transaction fees peaked in mid-April 2021), when Bitcoin was valued at $14,000, the total transaction fees paid per day soared to 1,495 BTC.
As a result, miners earned a total of $21 million in transaction fees that day, which is roughly half of what they earned from block rewards that day.
Since 2017, Bitcoin users have paid an additional $500 million in transaction fees as transactions were batch processed and protocols were upgraded.
Bitcoin transaction fees typically spike during periods when the network is active. With the Bitcoin network flooded with pending transactions, miners tend to prioritize transactions with higher fees. And during the May halving, bitcoin fees reached their highest level since the summer of 2019.
In addition, back in August 2019, Bitcoin’s total transaction fees were approaching the $1 billion mark. Currently, total Bitcoin transaction fees are approaching $2 billion.
As usage of the Bitcoin network surges, then competition for block space could increase dramatically. This will increase the transaction fee rewards for miners, while the rising price of bitcoin and the gradual reduction in energy costs (with the advent of new energy sources) means that there is still profit in it.
At its peak in 2017, the average cost of sending bitcoin was $55.17. On April 21, 2021, that figure hit an all-time high of $59.87. Ten days prior to that, it was only $14.86; the average transaction fee spiked by more than 300%, suggesting that as long as more people use the network pass there will be higher transaction fees.
What if Bitcoin miners can’t accept the shift in the way rewards are structured from block rewards to transaction fees and simply choose not to mine?
Third, what if miners went on strike
This is an interesting hypothesis. Since the reward structure has shifted, there are bound to be some bitcoin miners who don’t accept this mechanism, and what would happen to the bitcoin network if they went on strike and stopped mining bitcoins before they finished mining?
Regardless of the number of striking miners, it doesn’t really make much difference, because a decrease in the number of miners will directly lead to a decrease in network-wide computing power. The Bitcoin network will adjust the difficulty of the math problem based on the network-wide arithmetic to guarantee a new block in about 10 minutes or so.
In short, as long as someone digs, Bitcoin will end up being mined to 21 million anyway, and the fewer miners there are, the more they can dig out in a single session, and the remaining miners hate the fact that there’s no one to grab it from them, but of course Bitcoin has to not go to zero at that point.
What if all the miners went on strike?
That’s a big deal, because new blocks are needed to confirm transactions, and if all the miners go on strike and no more blocks are produced, then no more bitcoins will be spent in the future.
But people who use bitcoin can still see which wallet addresses hold bitcoins, how many bitcoins they hold, and can also see the full history of every bitcoin transaction that has ever been made.
It’s the transactions that give value, and without blocks to confirm transaction information, it’s really the end of Bitcoin.
But the blockchain is up, you bitcoin down, there are other cryptocurrencies stand up, miners and not only choose bitcoin, said really someone will put a white silver do not want?
Fourth, miners are evil
First, let’s spread a little knowledge: in very occasional cases, the bitcoin network will produce two (or more) blocks at the same time, which will lead to a temporary fork in the block chain. When the length of two temporary branches appears to be one long and one short, the short one (less than 2 blocks) branch will be abandoned, and all blocks on the short branch will be ruled invalid, and all transaction records in these blocks will of course be ruled invalid, and the 51% attack we often talk about is by creating a fork, lengthening their own forked blocks over another fork, so that their own blocks become mainstream.
After the bitcoin is mined, no new bitcoins will be mined, but miners can still discover new blocks, so the question arises, if a miner finds a new block and chooses not to release it, but to keep it, then the network will use the extra resources to mine another block, and these reserved blocks will not enter the blockchain for a while.
The next thing is that in a system where the transaction fee is 100% of the revenue, the good miners are the ones who mine the block, add it to the blockchain and get the transaction fee as payment, but those miners who do evil can make more money by holding the reserved blocks longer, simply put, in a future where the transaction fee is 100%, such bad miners make more money than the good miners!
For example: Now after discovering a block earlier, A convinces another miner, B, to extend his block.
In a network that only rewards miners with transaction fees, A can convince B to expand A’s block and include a smaller transaction fee. It would be in B’s interest to use A’s blocks if A’s blocks that do not authorize transaction fees are substantially lower than the fees included in other blocks.
If both A and B work together to extend the reserved block beyond the length of the other forked block, then A and B can mainstream their block and the shorter one will be dropped.
This means that once successful, the transaction records in A and B’s blocks can be rewritten at will. For example, let’s put it to you this way: A exchanged money with C for 1 bitcoin, and after A transferred 1 bitcoin to C’s wallet, A also got the money from C. Now A launches a 51% attack, and the 1 bitcoin A transferred out is back in his hands once again, so that A not only got the money, but the bitcoin is also still in his wallet.
This kind of evil behavior will affect a lot of people to a large extent.
It is foreseeable that because the transaction fee is a 100% incentive, it will make this weakening of mainstream computing power commonplace in the Bitcoin network, and then the dreaded “51% attack” on the Bitcoin network will suddenly become feasible.
Because the evil miners will always mine their own blocks, while other miners will not uniformly mine a block. This would make a 51% attack possible, while retail investors have far less than 51% of the computing power.
Transaction fees may not be enough to provide sufficient incentive for network security, so greatly increasing the likelihood of a 51% attack.
But fear not, unless the bitcoin network is completely unplayable and the network-wide arithmetic is so low that the cost of trying to do evil is simply too high, a situation that can occur in the bitcoin network harder than going to heaven.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/where-will-miners-go-when-the-last-bitcoin-is-mined/
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