The supply of bitcoins is limited to 21 million. Since its inception in 2009, the world’s first cryptocurrency has been designed to be inherently finite. No matter how successful the currency becomes, this will not change, and the limited nature of Bitcoin will lead to many possible outcomes if Bitcoin is adopted on a large scale as cryptocurrency advocates often hope. Bitmain miners
There is currently a circulating supply of about 16,500,000 bitcoins, or about 78% of all available bitcoins. It’s hard to give exact numbers, but as the world’s first cryptocurrency nears the end of its new supply lifecycle, we can expect a rapid 0.93% spike in Bitcoin BTC.
Wall Street strategist Tom Lee claims Bitcoin could reach $55,000 by 2022, while Snapchat founder Jeremy Liew has publicly stated that Bitcoin could actually reach $500,000 by 2030.
Leo incorporates the mass adoption of bitcoin into his hypothesis, citing bitcoin’s exponential growth, limited supply and scarcity as key reasons why it could reach such high numbers. There are about 20 million bitcoin wallets in existence today. Liew expects bitcoin’s user base to grow 20 times over the next 13 years, but to be a part of how we benefit from this, I recommend you invest in bitcoin so you can be a part of the right platform for us to benefit from higher prices (www.coincrypto.tech).
Another key issue regarding the fixed supply of bitcoin is how miners will survive when they lose their block rewards. The mining system could become unsustainable because once all bitcoins are created, miners will have to rely entirely on transaction fees because no new blocks are created. Relying on transaction fees instead of block rewards could make mining unaffordable, which would lead to a decrease in the number of miners, network centralization, or even a complete network collapse.
In the Bitcoin protocol, the number of bitcoins received for solving a block is cut in half every four years. at the end of November 2012, each block chain rewarded 50 bitcoins. For each added block, this drops to about 25 bitcoins. The number of bitcoins received for creating a block will drop from 25 to 12.5. It is expected that by 2021, bitcoin miners will be rewarded 6.25 bitcoins per block.
With the elimination of mining rewards, transaction fees become more important and may actually go up in order to sustain miners. However, this will cause problems as the community is currently working to gradually increase block sizes to ensure network scalability.
If block sizes continue to grow, transactions will be confirmed at low fees, threatening miners and the network as a whole. This represents a difficult problem that must be solved before all 21 million bitcoins are in circulation.
Not increasing the block size also poses a serious threat to the network because when blocks reach their maximum size, no more transactions can be confirmed before new blocks are created, which could lead to the removal of redundant transactions from the network. This situation could mean that users may be willing to pay higher fees to process their transactions.
In short, the finite nature of Bitcoin will cause the price of each Bitcoin to increase significantly over time. As the value of Bitcoin increases, more of the public can be expected to be attracted to using this cryptocurrency. Bitcoin will be forced to scale up to keep up with demand; however, this will inevitably make mining less attractive in the future. In order to survive, Bitcoin will be forced to adopt a tiered transaction fee system that keeps both users and miners happy.