Bitcoin is designed to emit a total of 21,000,000 coins with the last bits of coin to be mined in the year 2140.
What exactly is the supply schedule?
What happens after 2140?
The supply schedule is one of the most important aspects of Bitcoin, let me break it down for you 👇
What exactly is the supply schedule?
What happens after 2140?
The supply schedule is one of the most important aspects of Bitcoin, let me break it down for you 👇
Every block that is mined is allowed to produce a certain amount of bitcoin.
This amount is called the block reward and it started at 50 bitcoin per block.
Every 210,000 blocks (roughly every 4 years) this reward halves. From 50 to 25 to 12.5 to 6.25 and so on.
This amount is called the block reward and it started at 50 bitcoin per block.
Every 210,000 blocks (roughly every 4 years) this reward halves. From 50 to 25 to 12.5 to 6.25 and so on.
This is what is referred to as the supply schedule.
The exact parameters aren’t important, it’s the fact that it is known ahead of time and cannot change that makes Bitcoin so revolutionary.
Everyone can know exactly how much BTC will exist at any point in the future.
The exact parameters aren’t important, it’s the fact that it is known ahead of time and cannot change that makes Bitcoin so revolutionary.
Everyone can know exactly how much BTC will exist at any point in the future.
Ok but if the block reward is what incentivizes miners to invest in equipment to mine then what happens when the reward drops to 0 in 2140?
If miners are important in securing the network then how will they be incentivized to continue mining?
If miners are important in securing the network then how will they be incentivized to continue mining?
One thing to keep in mind is that every transaction in a block must include a fee that is paid to the miner.
These fees will still exist in 2140 and depending on the price of Bitcoin by then (🚀🌙) they will be enough to sustain a certain amount of hash power.
These fees will still exist in 2140 and depending on the price of Bitcoin by then (🚀🌙) they will be enough to sustain a certain amount of hash power.
It’s important to understand there is a direct relationship between the revenue generated from each block and the hash power on the network.
As the price goes up miners are willing to spend more money on more hash power to earn that extra revenue.
Will fees alone be enough?
As the price goes up miners are willing to spend more money on more hash power to earn that extra revenue.
Will fees alone be enough?
It’s hard to answer with certainty because the answer depends on another difficult question:
How much hash power is enough to secure the network?
Some would argue there is already orders of magnitude more hash than is truly needed. I’ll leave this question for another day.
How much hash power is enough to secure the network?
Some would argue there is already orders of magnitude more hash than is truly needed. I’ll leave this question for another day.
So what happens in 2140?
Blocks will continue to be mined every 10 minutes and the miners of those blocks will be rewarded with the transaction fees.
The question is how much hash power will there be and how distributed will it be?
I’m optimistic that there will be enough
Blocks will continue to be mined every 10 minutes and the miners of those blocks will be rewarded with the transaction fees.
The question is how much hash power will there be and how distributed will it be?
I’m optimistic that there will be enough
I hope this helped you understand a little bit about Bitcoin’s supply schedule and what happens after 2140 when the block reward drops to 0.
Be sure to follow me if you enjoy daily Bitcoin educational content!
Be sure to follow me if you enjoy daily Bitcoin educational content!
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