What happens to mining when we have reached 21 million bitcoins?

[Marijn3122]

Hello there,

I was thinking about the bitcoon system and it raised one big question for me.

Correct me if I'm wrong but when you are mining bitcoin you are essentially checking transactions. This means that without mining the system would not function anymore.

Beside that we know there is a maximum amount of bitcoin (21 million).

So with these facts in mind what happens when this limit is reached? No one will mine anymore because they won't get any bitcoin in return (the limit is reached), and therefore the system will be broken.

Am I missing something? I would like to hear from y'all.

Greetings

Marijn

[ranochigo]

Correct me if I'm wrong but when you are mining bitcoin you are essentially checking transactions. This means that without mining the system would not function anymore.

Not completely wrong. It's important to note that everyone verifies the transaction that they see. The miner's job is to include them in a block with the required POW and thus making it financially and resource intensive to rollback by building another chain on top of that.

Beside that we know there is a maximum amount of bitcoin (21 million).

So with these facts in mind what happens when this limit is reached? No one will mine anymore because they won't get any bitcoin in return (the limit is reached), and therefore the system will be broken.

No. At that point, the miner's primary source of income will be from transaction fees. In 2140, the total transaction fees would be larger if the transaction volume increases. If it's less than proportionate, Bitcoin will be easier to mine and a balance will be struck between the difficulty and the cost of mining.

[GreekCoiner]

This is something that will seriously concern us in the future. I was thinking it all the time and I conclude the followings:

1) The price of bitcoin will have been increased so much and the miners will receive enough profits from the TX fees.

2) The hashrate will decrease a lot because some miners' mining cost will hit their breakeven so they will stop mining and network will not be completely secured by 51% attacks. This may lead to price drop which will lead more miners to exit the mining business. I hope this never happens.

3) Bitcoin becomes digital gold so people who move coins there, they actually move serious value so they can pay the higher fees and award the miners for their job which is to protect the bitcoin network.

Guys this is just my opinion. I'm not completely sure if I missed something and if there will be actually a problem or not in the future. Please, if anyone knows something more he can post here to help us. 

[figmentofmyass]

This is something that will seriously concern us in the future. I was thinking it all the time and I conclude the followings:

1) The price of bitcoin will have been increased so much and the miners will receive enough profits from the TX fees.

2) The hashrate will decrease a lot because some miners' mining cost will hit their breakeven so they will stop mining and network will not be completely secured by 51% attacks. This may lead to price drop which will lead more miners to exit the mining business. I hope this never happens.

3) Bitcoin becomes digital gold so people who move coins there, they actually move serious value so they can pay the higher fees and award the miners for their job which is to protect the bitcoin network.

Guys this is just my opinion. I'm not completely sure if I missed something and if there will be actually a problem or not in the future.

you're exactly right---we don't know whether there will be a problem in the future. bitcoin's monetary policies are completely experimental. the economics that apply today while inflation is high will not squarely apply to the situation decades from now. we hope the transition to a deflationary currency will go smoothly with regard to mining security, but nothing is guaranteed.

one important issue to consider is the block size limit, which caps the available supply of confirmed transactions. this is the mechanism that causes fee competition among users---as demand for block space rises, fees also rise, which translates to higher revenue for miners. thus, it's important to consider that dynamic when considering whether the block size limit should be increased.

[hd49728]

the total supply of bitcoin is less than 21 million bitcoins (21 million is a rounded number) and when the block rewards halved to very small amount, the mining rewards to confirm transactions might be bigger than block rewards. We never know what will happen with bitcoin network, its transaction fee (in satoshi units or in USD value) in next one century. Miners leave the network, total hashrates fall down, more developments for other layers, many things can happen in next one century.

Some explanations on bitcoin total supply.

The supply will approach, but never reach, ₿21 million. Issuance will permanently halt c. 2140 at ₿20,999,999.9769.[6][7]:ch. 8

The protocol also halves the rate at which new bitcoin is created every 4 years, and limits the total number of bitcoin that will be created to a fixed total just below 21 million coins. The result is that the number of bitcoin in circulation closely follows an easily predictable curve that approaches 21 million by the year 2140.

[PrimeNumber7]

Beside that we know there is a maximum amount of bitcoin (21 million).

So with these facts in mind what happens when this limit is reached? No one will mine anymore because they won't get any bitcoin in return (the limit is reached), and therefore the system will be broken.

No. At that point, the miner's primary source of income will be from transaction fees. In 2140, the total transaction fees would be larger if the transaction volume increases. If it's less than proportionate, Bitcoin will be easier to mine and a balance will be struck between the difficulty and the cost of mining.

When the limit (of the total coin in circulation) is reached, miners only source of income will be from transaction fees. As the block subsidy (the portion of the block reward a miner receives for just finding a block) declines, a greater share of miners' income will be that from transaction fees, most likely.

[ranochigo]

When the limit (of the total coin in circulation) is reached, miners only source of income will be from transaction fees. As the block subsidy (the portion of the block reward a miner receives for just finding a block) declines, a greater share of miners' income will be that from transaction fees, most likely.

I assume that there is still a small portion, albeit tiny as compared to the transaction fees that would be paid to the miners for either including non-standard transactions and transactions with lower fees. The latter assumes that there are still "Transaction Accelerator" services operated by mining sites.

[bitadelco]

There are a lot of potential hypotheticals. Keep in mind that the mining economics is more than just transaction fees. Presumably in the year ~2140, technology and energy could be far more inexpensive relative to current state. Think people tend to only presume transaction fees won't be sufficient while ignoring the rest of the profit equation.

[PrimeNumber7]

When the limit (of the total coin in circulation) is reached, miners only source of income will be from transaction fees. As the block subsidy (the portion of the block reward a miner receives for just finding a block) declines, a greater share of miners' income will be that from transaction fees, most likely.

I assume that there is still a small portion, albeit tiny as compared to the transaction fees that would be paid to the miners for either including non-standard transactions and transactions with lower fees. The latter assumes that there are still "Transaction Accelerator" services operated by mining sites.

I would describe these types of fees as "transaction fees" even if they are not being received by the miners via 'traditonal' means.

[Apostlekin$$$]

Some people will still be selling and some will still be buying, the circulation won't halt if you think about it, 1 BTC can be shared among many people, don't forget that we have sats, you can decide to buy 10$ worth of BTC only