What happens after all bitcoins are mined?

 As the originator of cryptocurrency, the total amount of Bitcoin is capped at 21 million.

As of now, the number of bitcoins dug up in the world has reached 83% of the total, and it is estimated that by 2040, more than 99% of bitcoins will be dug up. The question is, what will happen when all bitcoins are mined?

As we all know, "digital gold" Bitcoin is a deflationary virtual currency. Subject to the 21 million fixed circulation set by the creator Satoshi Nakamoto, Bitcoin is destined to not be able to print and issue unlimited banknotes like US dollars and British pounds.

As the saying goes: Things are precious. The scarcity of Bitcoin can promote its ever-increasing value. But at the same time, when all the bitcoins are mined, the miners who maintain the bitcoin network will no longer be able to get block rewards, which also raises a series of questions:

1. What happens after all bitcoins are mined?

2. After reaching the supply cap of 21 million, what will the miners do?

3. How will miners make a living in the future?

4. What incentives are there to allow miners to continue to maintain Bitcoin network security?

In fact, the answer is very simple. It can be said that the life of miners lies in transaction fees.

What happens after Bitcoin is mined?

Whenever a new block is mined, miners will receive certain rewards, including block rewards for newly mined bitcoins and transaction fee rewards. These two big rewards can motivate miners to do the right thing and protect the Bitcoin network.

Once all the bitcoins are mined, miners will no longer be able to get block rewards, and their source of income is only transaction fees. Will they make ends meet? If the number of miners is drastically reduced due to a sharp drop in income levels, will this eventually lead to the collapse of the Bitcoin network?

The answer is negative.

As shown in the figure below, the research of crypto asset management platform Interchange and cryptocurrency analyst Awe & Wonder found that Bitcoin transaction fees are rising. By 2030, Bitcoin transaction fees will exceed block rewards. Once transaction fees account for more than 50% of the rewards miners receive, then miners can transition to the mode of making money from transaction fees.

Picture originated from:@Awe_andWonder Twitter

Although no one dared to pack tickets, there is sufficient evidence that transaction fees are sufficient to maintain the livelihood of miners and maintain the stability of the Bitcoin network.

After all, as the value of Bitcoin continues to increase, so too will the transaction fees that miners receive. However, some people have also raised questions about whether the high transaction fees will make users stay away from Bitcoin?

In fact, bitcoin transaction fees are much lower than the handling fees incurred by bank transfers and house purchases. Interchange pointed out that

"The real estate transaction fee is 2% of the average transaction price or $8,000 per transaction. I believe that in the future, people will be more willing to spend $50 to pay for transactions through encrypted assets. After all, encrypted assets will not be easily lost, damaged or stolen. Real estate faces certain risks in times of turmoil."

In the future, transaction fees will account for an increasing proportion of miners' income sources, and as the price of BTC gradually rises, transaction fees will also increase. In view of this, it is economically feasible to use transaction fees to incentivize miners to continue to maintain the stability of the Bitcoin network.

For Bitcoin miners, their source of income will not change from relying on block rewards to relying on transaction fees overnight. The future is full of variables, but there is undoubtedly enough time for miners to adapt to the new model to jointly maintain Bitcoin network security.