What happens when all bitcoins are mined?

[tonto]

So what will miners do when all the bitcoins are mined?   At that point are miners needed?  Or will they still get "rewards" (like due to the network fees) to keep calculating for transactions?

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[DeathAndTaxes]

Miners are always needed. 

"Mining" (a horrible name) = hashing transactions into blocks.

If there are transactions then you need blocks and that requires miners.

[muyuu]

Blocks will return 0 satoshis by year 2141 or so. I won't be around.

Doesn't matter, mining rewards will be testimonial in a couple decades time. By then fees will have to amount to something significant to reward mining, because mining is necessary to confirm transactions (see Death AndTaxes post above).

[tonto]

at that point, can we all go back to the original client's "generate coins" option, or simply install some cheap old GPU that hashes at like 1MH/sec?
 
where do the network fees go?

[muyuu]

At that point (in about 120 years time...) you will compete just the same as now for rewards. But these rewards will come exclusively from transaction fees.

In the newbies board:

Helpful Articles for Newcomers (Please read before asking for support.)
https://bitcointalk.org/index.php?topic=15918.0

[DeathAndTaxes]

at that point, can we all go back to the original client's "generate coins" option, or simply install some cheap old GPU that hashes at like 1MH/sec?
 
where do the network fees go?

What?

Fees + subsidies = miner's reward.  Today fees are negigible and the subsidy is huge.  As subsidies decline to 0 over the next century fees will need to rise. 

No you can't go back to some ancient CPU or GPU.  If you do alone your share of the network (and thus reward) will decline.  If everyone does then difficulty collapses to some tiny fraction of its current levels and someone can 51% attack it with a couple thousand dollars in computing hardware.

[tonto]

at that point, can we all go back to the original client's "generate coins" option, or simply install some cheap old GPU that hashes at like 1MH/sec?
 
where do the network fees go?

What?

First fees + subsidies = miner's reward.  As subsidies decline to 0 fees will need to rise.

No you can't go back to some ancient CPU or GPU unless you want the network to be a tiny fraction of its current power and someone can 51% attack it with $500 in computing hardware.

ahhh, good point, I hadn't thought of the 51% attack.  So I'm doomed to keep buying new GPUs until the day I die

[Dhomochevsky]

No. Just until 2013 or so. After that GPU mining will most likely be unprofitable. FPGA mining coupled with the reward halving would mean high efficiency is needed to mine. You won't get that from GPUs. Later on ASICs will make the game even harder.

[rjk]

The key to the OP's question was something that took me a while to find out initially. The answer is that while you currently have a subsidy for solving a block, as you know it will eventually halve into nothingness.

However, just because the subsidy is no longer there, doesn't mean you can't solve more blocks. The solving of a block doesn't necessarily require generation coins to be paid out - indeed, you could claim fewer generated coins than are actually available, if you wished to.

Therefore, you can continue to solve blocks beyond the elimination of the subsidy, and the block solving is still necessary to allow transactions to be processed.

By that time, it is expected that transaction fees will be the norm, and will also be enough to make mining profitable still, which would be the incentive for mining and therefore keeping the network secure.

[jkminkov]

blockchain... erm ... bloatchain will be 1000 terabytes by that time, and bitcoin would be dead cause you'd have get 10 empty hard drives just to hold it all...

[bravetheheat]

blockchain... erm ... bloatchain will be 1000 terabytes by that time, and bitcoin would be dead cause you'd have get 10 empty hard drives just to hold it all...

Who knows? Hard disk capacities will grow exponentially with time. Today, one terabyte per 3.5 inch HDD. Tomorrow, one petabyte.

[muyuu]

No. Just until 2013 or so. After that GPU mining will most likely be unprofitable. FPGA mining coupled with the reward halving would mean high efficiency is needed to mine. You won't get that from GPUs. Later on ASICs will make the game even harder.

I bet my GPUs will continue chugging along. Mostly because they basically run for free, as they are within the flat rate I pay for my bills. Lots of GPUs run on "free money" and will continue to run post-Jan 2013.

Profitability depends on BTC price and difficulty. It can perfectly well adjust to be profitable (say, go up to 12$ with 20% more difficulty than now) and predictions are hard at this point. If you are totally sure of your scenario, go and speculate heavily on it. You will be rich.

The key to the OP's question was something that took me a while to find out initially. The answer is that while you currently have a subsidy for solving a block, as you know it will eventually halve into nothingness.

However, just because the subsidy is no longer there, doesn't mean you can't solve more blocks. The solving of a block doesn't necessarily require generation coins to be paid out - indeed, you could claim fewer generated coins than are actually available, if you wished to.

Therefore, you can continue to solve blocks beyond the elimination of the subsidy, and the block solving is still necessary to allow transactions to be processed.

By that time, it is expected that transaction fees will be the norm, and will also be enough to make mining profitable still, which would be the incentive for mining and therefore keeping the network secure.

This paradigm switch is a test we still need to pass.

Personally I think it's a bad idea to subject the network to a traumatic test every 4 years. Speculation will go nuts every time we approach these milestones. It's going to be interesting to say the least. I'd rather have a flat production rate, which will have a similar result inflation-wise (approaching 0% growth gradually).

blockchain... erm ... bloatchain will be 1000 terabytes by that time, and bitcoin would be dead cause you'd have get 10 empty hard drives just to hold it all...

It's completely absurd to make predictions so far in the future. There are mechanisms to reduce space drastically, and also storage density per $ has never stopped doubling every few years since the 50s.

[DeathAndTaxes]

blockchain... erm ... bloatchain will be 1000 terabytes by that time, and bitcoin would be dead cause you'd have get 10 empty hard drives just to hold it all...

In 1995 I went to college and bought one of the first 1 Gigabyte consumer hard drives.  It costs me about $300 (more like $500 in 2012 dollars).  Cost per GB = $300.

In 2007 Hitachi released the first 1 Terrabyte hard drive for roughly the same cost.  Cost per GB = $0.30

Hard drive capacity growth has slowed mainly due to demand for faster drives (SSD) still today you can get a 4TB drive for <$0.10 per GB.

So say the rate of doubling has slowed to every 2.5 years (instead of 1.5 years for the first two decades).  That is 16x capacity increase per decade.  4TB today, 64 TB in 2022, 1 PB in 2032.   While eventually we will hit limits of magnetic but the only realistic constraint on flash density is cost.  3.5" flash drive is mostly empty space.  Even with current technology you could make drives 10x a large (at 10x the cost).  Moore's law will drive the cost of flash down very quickly.

Flash drives cost ~$1 per GB (for slower models).  Every 3 years that will fall by a factor of 4.  <$0.06 per GB in 2020.

[BurtW]

This just in:  Seagate reaches 1Tb per square inch, hard drive to reach 60TB capacity

See:  http://news.cnet.com/8301-21546_3-57400009-10253464/seagate-reaches-1tb-per-square-inch-hard-drive-to-reach-60tb-capacity/

As described in this article Seagate is investing in HAMR.  I work in the disk drive industry (disk drive firmware engineer) and there are other technologies on the roadmap (SMR, microwaves, patterned media) that will reach even higher capacities.

And, our goal as always is to reduce cost at the same time we increase capacity.

Edit:  BTW flash is so "today", there are new non volatile memory technologies being developed that are as fast as DRAM and scale like DRAM so we can expect to be able to have processor chips with X GB of on board non volatile DRAM speed memory within a few years.  This would mean you could just store everything you need (OS, programs, data) right in the processor chip in a lot of consumer applications.