Bitcoin is deflationary, which means that the mined currencies are ended. Once the miners have discovered 21 million bitcoins, it will be the total amount of bitcoins that exist. But because of the lost and forgotten portfolios, the number of “active” bitcoins will be much lower and there really is no way to determine the exact number.
Bitcoins can be lost through unrecoverable passwords, forgotten wallets when Bitcoin is worthless, hardware bugs or the death of the owner of bitcoins. It is extremely unlikely and even impossible to recover lost coins. As of March 31, 2015, the total value of lost bitcoins was estimated at approximately $ 1.23 billion. A recent figure at the end of 2016 suggests that up to 25% of circulating bitcoins (just over 4 million) are “dead”, bringing the estimate to about $ 25 billion.
When Will the Last Bitcoin be Mined?
Bitcoin Halving Events.
This is a very important concept to understand when the last bitcoin is extracted. Every four years or so, the number of new bitcoins created and earned by minors with each new transaction block is halved. This is part of the predictable and transparent Bitcoin monetary policy, which can be verified in the source code in the Bitcoin Core GitHub repository.
We are currently Reward Number 3 and we have about three more years until the reward payout is halved. As you can see in the table above, there will be a total of 34 “rewards”.
Originally, 50 bitcoins were earned as a reward for mining a block. Then it dropped 25 bitcoins, and then to 12.5 bitcoins. In 2020, it’ll drop to 6.25 bitcoins.
So if we do the math, if there is a halving event every four years, the last Bitcoin should be mined sometime in the year 2140.
What Happens When the Last Bitcoin is Mined?
Is the whole system closed because bitcoins are no longer tuned to extract new blocks? Probably not. Bitcoin Miners also receive transaction fees, and these charges should keep Bitcoin afloat. As the Bitcoin price rises, the rates assigned to each transaction also increase. Take a look at this table, which summarizes Bitcoin’s average transaction rate over time:
Finally, these transaction fees should be large enough to encourage minors to continue working even if they do not receive a full reward. As long as the new Bitcoins stop, the Bitcoin miners receive a payment. Of course, some miners are (and are) already forced out of the market.
However, the idea of Bitcoins worth $ 50,000 or $ 100,000 is not unfounded. Currently, at the time of writing this article, the fastest and cheapest transaction fees are currently 150 150 satoshis/byte. For the average transaction size of 226 bytes, this translates into a rate of 33,900 satoshis (about $ 2). Remember that all transaction fees go to the person or persons who operate the block.