What happens once all Bitcoins are created?

[Frizz23]

What will happen to Bitcoins, or more specific, to the price of a Bitcoin, once all 21 million are created?

(1) At the moment we all talk about miners, GPUs, ASCIS, bulletin boards are filled with discussions. But once no new BTC are mined, will the price drop to 0? Because no one cares about BTC any more?

(2) BTC is meant to be a currency, right? But can I buy beer with it? Or a notebook? Book a flight? It seems all people do at the moment is trade it on MtGox, etc. - but they don't buy goods. No?

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[Foxpup]

What will happen to Bitcoins, or more specific, to the price of a Bitcoin, once all 21 million are created?

At the exact moment the block reward drops to zero (around the year 2140), absolutely nothing will happen, since by that time the block subsidy will have already been an insignificant fraction of mining rewards for well over a hundred years. Instead, mining rewards will come from transaction fees. Part of the reason for the gradual reduction in the block subsidy is to avoid any craziness happening when it disappears completely.

(1) At the moment we all talk about miners, GPUs, ASCIS, bulletin boards are filled with discussions. But once no new BTC are mined, will the price drop to 0? Because no one cares about BTC any more?

Why would no one care about Bitcoin when the block subsidy drops to zero (after it's already been insignificant for over a hundred years)? That doesn't make any sense.

(2) BTC is meant to be a currency, right? But can I buy beer with it? Or a notebook? Book a flight? It seems all people do at the moment is trade it on MtGox, etc. - but they don't buy goods. No?

There are already many places where you can spend your bitcoins, and the number of places that accept bitcoins is likely to continue increasing in the future as Bitcoin becomes more widely known.

[1541]

(1) At the moment we all talk about miners, GPUs, ASCIS, bulletin boards are filled with discussions. But once no new BTC are mined, will the price drop to 0? Because no one cares about BTC any more?

As far as I got it, once all 21 million BTC were mined, new blocks can still be created through mining, but won't be rewarded with the newly generated BTCs (50 BTC at the moment). Instead of this, the fees will rise, so that the fee value will be payed to the miners to create new blocks. Without the creation of any new blocks, transactions won't be possible...

[Gabi]

(1)Transaction fees
(2)You can buy everything with bitcoin.

[tenakha]

What will happen to Bitcoins, or more specific, to the price of a Bitcoin, once all 21 million are created?

(1) At the moment we all talk about miners, GPUs, ASCIS, bulletin boards are filled with discussions. But once no new BTC are mined, will the price drop to 0? Because no one cares about BTC any more?

(2) BTC is meant to be a currency, right? But can I buy beer with it? Or a notebook? Book a flight? It seems all people do at the moment is trade it on MtGox, etc. - but they don't buy goods. No?

I think the fact that there is a limited supply will actually increase the price of BTC over time. Think about it, everything rare in the world is expensive : Gold, Diamonds etc - because they are hard to mine.
Fiat Currencies are getting devalued all the time - because they keep printing more! Thus your $'s are losing value! But BTC - there is a fixed and dwindling amount ... this should cause the price to increase.

[rontus]

I think that the time before all the coins are created is long enough for Bitcoin network to have reached such a high usage that the transaction fees can support quite a large mining network.

[weirdgod]

I for one am eagerly awaiting time when revard for new mined block halves...
Will be interesting to see what happens to community/price then.

[Frizz23]

What will happen to Bitcoins, or more specific, to the price of a Bitcoin, once all 21 million are created?

... absolutely nothing will happen, since by that time the block subsidy will have already been an insignificant fraction of mining rewards ...

(1) Assuming Bitcoins are widely used by then, there will be lots of trades - and lots of transaction fees.
... or ...
(2) Assuming no one will use Bitcoins, there will be no transaction fees.

I'll bet on option 2

There are already many places where you can spend your bitcoins, and the number of places that accept bitcoins is likely to continue increasing in the future as Bitcoin becomes more widely known.

Just because there are places where Bitcoins could be spent does not mean people do use them.

The places you mentioned are more or less exotic (e.g. a book store for "Document preparing the common competition in french politics sciences" hrmmmm ...). Once I can bay a toaster on Amazon using Bitcoins I will be convinced. And happy

[ab8989]

If all bitcoins ever get created, that is not possible unless bitcoin has proven to be a huge success.

[Foxpup]

(1) Assuming Bitcoins are widely used by then, there will be lots of trades - and lots of transaction fees.
... or ...
(2) Assuming no one will use Bitcoins, there will be no transaction fees.

I'll bet on option 2

Since bitcoins are not backed by anything, they have value solely because they are useful for certain things. If nobody's using bitcoins, they'll be worthless anyway, regardless of how many are being created.

Just because there are places where Bitcoins could be spent does not mean people do use them.

Right. People are paying over $10 for something that they're not actually planning on ever using. That makes perfect sense.

The places you mentioned are more or less exotic (e.g. a book store for "Document preparing the common competition in french politics sciences" hrmmmm ...). Once I can bay a toaster on Amazon using Bitcoins I will be convinced. And happy

You can buy an Amazon gift card with bitcoins. Are you happy now?

[popcoin]

If all bitcoins ever get created, that is not possible unless bitcoin has proven to be a huge success.

[Monkey1]

Fiat currencies are not backed by anything anymore.  Except for a vague promise from a central bank, which prints more currency whenever it feels like it.  In that respect, but coin is very similar to fiat currencies, except for the fact that it is backed by the user community rather than a central bank.

[greyhawk]

(2)You can buy everything with bitcoin.

What about love?

[Frizz23]

Just because there are places where Bitcoins could be spent does not mean people do use them.

Right. People are paying over $10 for something that they're not actually planning on ever using. That makes perfect sense.

Remember the dot-com bubble? Remember e.g. InfoSpace? In March 2000 this stock reached a price $1,305 per share, but by April 2001 its price had crashed down to $22 a share.
According to your logic: People were paying over $1,305 per share for something that they're not actually planning on ever using. That makes perfect sense.

Or have a look at http://en.wikipedia.org/wiki/Tulip_mania.

Do you know how markets work? A thing is worth what someone else is willing to pay for it.

[Shagnasty]

Mining will have slowed down drastically before they hit zero. If Bitcoin is still going by then, theoretically, it will have increased is value tenfold. In order for this to happen, many many more merchants will be taking BTC.

[edd]

I can't remember the last time I exchanged BTC for a more conventional currency yet I continuously find myself bitcoin poor despite the reliable (albeit small) quantity of incoming coins. Why? you might ask. Because I spend them on goods and services offered by the community.

[Foxpup]

Remember the dot-com bubble? Remember e.g. InfoSpace? In March 2000 this stock reached a price $1,305 per share, but by April 2001 its price had crashed down to $22 a share.
According to your logic: People were paying over $1,305 per share for something that they're not actually planning on ever using. That makes perfect sense.

I may be going out on a limb here, but it's entirely possible that at least some of the people who payed $1,305 for a share of InfoSpace did in fact plan on using these shares to receive the huge dividends that these new Internet companies seemed to be promising. Of course, the huge dividends never materialised, but that's the risk investors take when investing in highly speculative ventures. Most people who invest money in a thing do so with the intention of using that investment to make even more money.

Or have a look at http://en.wikipedia.org/wiki/Tulip_mania.

The people who bought overpriced tulips planned to use their tulips to make a profit by selling them to greater fools. Not the most sensible use for tulips, and certainly not sustainable, as they found out the hard way, but it is a use nonetheless.

Do you know how markets work? A thing is worth what someone else is willing to pay for it.

Yes. And why are people willing to pay for things? Because they want to use it for something!

You can't seriously be asking what will happen to the value of bitcoin when a particular event happens after people have already stopped using it and aren't ever going to use it. If nobody uses Bitcoin, its value is zero, regardless of all other factors. Bitcoin has value only because people are, in fact, using it right now. Some are using it to buy things and some are using it as a speculative investment, but it doesn't matter what they're using it for; as long as Bitcoin is useful for something, it has value.

[Frizz23]

(1) Do you know how markets work? A thing is worth what someone else is willing to pay for it.

You can't seriously be asking what will happen to the value of bitcoin when a particular event happens after people have already stopped using it and aren't ever going to use it. If nobody uses Bitcoin, its value is zero, regardless of all other factors. Bitcoin has value only because people are, in fact, using it right now. Some are using it to buy things and some are using it as a speculative investment, but it doesn't matter what they're using it for; as long as Bitcoin is useful for something, it has value.

D'oh! Seriously dude! Goto(1)

If someone is willing to pay 50$ for my poo then my poo is worth 50$.

[Foxpup]

(1) Do you know how markets work? A thing is worth what someone else is willing to pay for it.

You can't seriously be asking what will happen to the value of bitcoin when a particular event happens after people have already stopped using it and aren't ever going to use it. If nobody uses Bitcoin, its value is zero, regardless of all other factors. Bitcoin has value only because people are, in fact, using it right now. Some are using it to buy things and some are using it as a speculative investment, but it doesn't matter what they're using it for; as long as Bitcoin is useful for something, it has value.

D'oh! Seriously dude! Goto(1)

Seriously dude? Removing my response to your question from your quote, then claiming I haven't answered it?

Do you know how markets work? A thing is worth what someone else is willing to pay for it.

Yes. And why are people willing to pay for things? Because they want to use it for something!

At first I was willing to give you the benefit of the doubt, and assume you were ignorant or grossly misinformed about basic economics, but now I'm convinced I'm being trolled. But just in case, I'll reiterate the point you seem to be missing.

If someone is willing to pay 50$ for my poo then my poo is worth 50$.

Nobody's going to pay anything for your poo unless they want to use it for something (organic fertiliser, or whatever). And they're not going to pay $50 for it unless they believe the thing they're planning to use it for is worth that amount.

This will be my last post on this subject unless you can come up with something resembling a rational argument.

[billotronic]

isn't this all a moot point? not only will most of us be pushing up daisys... but the bloody world is going to end soon any hoe.


(and by most i obviously exclude the walking dead... but i don't think they use BTC)