What will be the state of Bitcoin after all coins are mined? Even before that what happens to miners as it gets close to the final mint? Is one 1 Satoshi, 00000001 the absolute smallest demonimation or can fractions thereof be created if needed?
From my understanding, we are kind of seeing it right now. While new Bitcoin can be mined, it seems to be a slow complicated process. I'm not sure of how accurate the snapshots are, but essentially, the Bitcoin continues to sell, regardless of whether or not new ones are keeping pace. They are already selling them in fractions, which is why their value has gone up.
One would assume, that if someone suddenly dropped the remaining Bitcoin into the market, it would drive down the value of every Bitcoin to adjust. Eventually, the market would adjust the value according to the remaining traders, and would continue to be traded in fractions. The slow process of mining them is probably intended to help provide stability as the total number is produced. Since it is digital, it can be divided infinitely into fractions and adjust appropriately, at least in theory.
What makes it complicated, is that we think of this in terms of real money value. Bitcoin wasn't really made to hold monetary value in another form of currency. Instead, it seems it was created in order to offer an alternative to fiat currencies created and controlled by governments. The value of Bitcoin is only affected by those willing to trade and recognize it.
