At some point probably about 2140, the last bitcoin will be got. What will occur further?
It is known that all 21 million bitcoins (Bitcoin), and when all of them are got new are available to a mining won’t appear any more. The bitcoin differs with it from national currencies radically — at them the money supply constantly grows as to the government inflation is profitable. At the same time it leads to currency devaluation, so, in practice certain people and families become poorer.
In a case doesn’t happen to bitcoins of it, and, theoretically, over time they shall become only is more valuable as the quantity of the new tokens arriving in system constantly decreases — but also, the total quantity is limited to 21 million. Approximately each four years the quantity of bitcoins which reward a mining of the next block is cut by half: at first it were 50 bitcoins, then 25, and then and 12,5.
In 2020 it will be already 6,25 bitcoins. Thus, if the governments constantly increase a money supply, the algorithm of bitcoin works exactly the opposite, preventing inflation. Besides, at different times various amounts in bitcoins became are forever unavailable to turnover — for this purpose to throw out or destroy the old hard drive or the USB stick with a purse enough. Therefore, the real pool of coins, available to use, appears even less.
Bitcoin Mining. Brief summary
Mining of bitcoins consists in calculation of hashes, that is the computer is used for the solution of some difficult mathematical task. When it is solved, the next block of transactions which is added to a blockchain is created.
The blockchain is a public register of all bitcoin transactions, and any new transaction is added registers in this register.
By means of calculation of hashes it is determined what transaction is more priority, and if miner cease to do the part, network will cease to work. What will occur when all 21 million bitcoins are received? Whether the system will cease to work, miner won’t earn reward for closing of blocks any more? The matter is that miner also receive commission charges for handling of transactions, and this income won’t get to anywhere.
The bitcoin without mining
At some point probably about 2140, will be got the last bitcoin, but it doesn’t mean that the network will fail. In addition to awards for calculation of hashes, miner receive charges for handling of transactions. Now these charges are small, a percent share order, but in process of decrease in remuneration for calculations of new blocks the size of the commission for handling of transactions will probably grow — together with bitcoin cost.
These charges shall be supported at such level still to give to miner motivation so though new bitcoins will cease to appear, the bitcoin-miners will be received all the same by money.
Of course, some will be driven out of the market (it occurs and now): as the bitcoin becomes more difficult to be got, miner should use for this purpose more and more effective equipment. Matter in an energy consumption — when using insufficiently effective equipment of accounts for electricity can be such that the miner will appear at a loss; the got bitcoins just won’t cover a cost.
The cost of bitcoin shall (and will) to continue grow
Commission charges for handling of transactions shall be rather big, so, the cost of bitcoin shall grow — and, fortunately, this mechanism is partly built-in in bitcoin. As we already spoke, the offer of traditional currencies in practice isn’t limited, and the governments at own discretion increase a money supply, at the same time cost of each separate monetary unit, for example, of dollar, decreases.
Imagine that the money supply is a huge pizza, and, increasing a money supply, you don’t increase pizza, and you cut it on more and more small pieces. As the government increases a money supply (that is cuts pizza more and more small), the cost of money (the piece size) decreases. Growth of a money supply stimulates investments as the companies and people should spend money until they fell in price too strongly so the government often purposely does us poorer.
With bitcoin the money supply will grow in a case till 2140, however, as it is in advance described and therefore predictable process, it doesn’t lead to the above described negative consequences. In July, 2016 the award for calculation of a hash was reduced from 25 to 12,5 bitcoins. In the run-up to this event the bitcoin price considerably increased, approximately from $450 up to $750.
Growth of the price stopped when the award decreased so it is possible to assume that when receipt of new bitcoins again twice decreases — possibly, it will happen in July of the 2020th — the cryptocurrency price will jump up again. The same shall occur in four years.
Bitcoin in (remote) future
The bitcoin in process of growth of cost of bitcoin will grow in future also remuneration for handling of transactions. However, that this growth was enough in case of the termination of a mining, the price of bitcoin shall significantly will increase, and the assumption that the bitcoin can costs both $50 000, and $100 000, it doesn’t seem mad.
As well as any other currency, bitcoin can be split up for smaller units, and the smallest of them is called Satoshi. It is possible to remember that once cent, the penny or kopek were quite large sum, but now, owing to inflation, they strongly fell in price. In a case with bitcoin the return scenario is possible — Satoshi can become a trade item, and the bitcoin will be used only for large calculations. Today the commission in 10 thousand Satoshi sounds not too seductively, but in the future it can change.