The maximum number of bitcoins that can be mined is 21 million. So, what happens when all bitcoins are mined?
What happens when all bitcoins are mined?
No new bitcoins will be issued after the maximum number of bitcoins has been reached, even if that number ultimately falls slightly below 21 million. Bitcoin transactions will continue to be pooled into blocks and processed, and Bitcoin miners will continue to be rewarded, but likely only with transaction processing fees.
Bitcoin miners will undoubtedly be impacted when Bitcoin reaches its upper supply limit, but how much will depend on how Bitcoin evolves as a cryptocurrency. Bitcoin miners might still be able to make money exclusively from transaction processing fees in 2140 if the Bitcoin blockchain processes many transactions.
Even with low transaction volumes and the loss of block rewards, miners can still make money if Bitcoin in 2140 mainly serves as a store of value rather than for daily purchases.
In order to process high-value transactions or large batches of transactions, miners can put greater transaction fees. More efficient "layer 2" blockchains, such as the Lightning Network, work in conjunction with the Bitcoin blockchain to make it easier for users to spend bitcoin on a daily basis.
But if Bitcoin mining in the absence of block rewards ceases to be reliably profitable, then some negative outcomes can occur:
Miners form cartels: Groups of miners may collude in an attempt to control mining resources and command higher transaction fees.
Selfish mining occurs: Selfish miners work together to hide newly created valid blocks, which are then released as orphan blocks that have not been verified by the Bitcoin network. This practice can lengthen the time it takes to process a block and ensure that high fees are paid when new blocks are eventually added to the network.
Conclusion
In the year 2140, would Bitcoin act like cash or gold bars? Because of the ongoing development of the Bitcoin ecosystem, it is possible, if not likely, that Bitcoin will start to evolve over the following decades. No new bitcoins will be issued after the 21 million coin cap is reached, regardless of how Bitcoin develops. Reaching this supply limit is likely to have the biggest impact on Bitcoin miners, but it's possible that Bitcoin investors could experience negative impacts as well.
