Bitcoin mining refers to the action of adding new bitcoin units to supply. Bitcoin is analogous to gold as extracting gold is also famous for mining, and gold is also scarcer than bitcoin. All the more, this is the prominent reason why bitcoin is popular as virtual gold. The store value of bitcoin is very high in contrast to other cryptocurrencies, and a market cap of bitcoin recently reached a milestone of $1 trillion.
Bitcoin offers several opportunities to make money from it, such as bitcoin trading, investing, and mining. If you want to get profitable results in your bitcoin trading venture, check authentic websites like what are the cfds and how they work for more details. To mitigate the concept of inflation, Satoshi Nakamoto, the so-called inventor of bitcoin, issued a finite supply of bitcoin.
To sum up, there are 21 million bitcoin units only which miners can ever mine. Therefore, undeniably, we can increase the limited supply of bitcoin if most bitcoin investors vote to increase its supply.
However, no savvy investor or trader will vote to increase the supply of bitcoin as it will decrease the store value of bitcoin. Many people wonder what will happen to bitcoin once bitcoin miners mine the entire supply of bitcoin, and there are no bitcoins left. Here is an utter portion demonstrating the solution to your query.
Fundamental of bitcoin mining!
Before understanding the future of bitcoin mining, you should know about bitcoin mining. As mentioned ahead, bitcoin mining is the action of adding new bitcoin units to circulation. Several people consider bitcoin mining as an income source. However, the essence of bitcoin mining is much more than that. Bitcoin mining does not merely maintain the supply of these digital tokens but also mitigates the chances of double-spending.
Bitcoin miners verify every transaction and broadcast or upload this transaction to a public distributed ledger in the form of blocks. However, the information on the blockchain is merely present in the hashing function, and it does not reveal any personal information regarding either send or receiver.
The only public identity of the bitcoin complex is the wallet address. Therefore, Bitcoin miners have to decode a math puzzle to guess a 64-bit hashing function. Once these miners guess the number accurately, they can avail the block reward.
Why did Satoshi Nakamoto issue bitcoin with a limited supply?
After the economic abysmal of 2007, Satoshi Nakamoto noticed significant flaws in the traditional banking system, and one of these flaws was inflation. Inflation is a change in the money supply that causes an inclination in the price of goods and services.
Federal banks are responsible for creating and destroying fiat currencies to experiment and come up with better ideas to hike the economy. However, such incidents sometimes lead to inflation. Inflation only occurs when there is an infinite supply of money.
To mitigate the concept of inflation from the financial system, Satoshi Nakamoto, the so-called inventor of bitcoin, issued bitcoin with a finite supply. Even he was not familiar with the idea that bitcoin would acquire such high store value in the future. Since bitcoin has a finite supply and is politically independent, no one can interfere in the supply chain of bitcoin units.
What will happen when bitcoin miners mine 21 million bitcoin units?
There are only 21 million bitcoin units. Bitcoin miners avail new bitcoin units as the block reward of bitcoin mining. The block reward of bitcoin is variable and not permanent as it keeps decreasing after every 210000 blocks.
Bitcoin halving is the event that decreases the block reward of bitcoin mining after every four years. According to bitcoin halving, bitcoin miners will mine the last bitcoin unit in the year 2140.
Suppose bitcoin block reward is the mere motive of bitcoin miners for involving computing capital and bitcoin mining rigs. Then, why will bitcoin miners continue bitcoin mining after the last bitcoin unit?
Bear in mind that the bitcoin mining block reward also contains a transaction cost alongside the number of bitcoin units. Therefore, if there are no bitcoins for rewarding bitcoin miners, transaction cost will act as the block reward.
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The portion, as mentioned earlier, is everything you should know about the future of bitcoin mining.