Mining the 21 millionth BTC has finished, now what?
Like gold, Bitcoin cannot simply be created arbitrarily and must be mined out via digital means. Of course, It has a limited and finite supply. In fact, there are only 21 million Bitcoins that can be mined in total.
In January 3rd, 2009 was mined the first bitcoin in the first block by someone called Satoshi Nakamoto and the last bitcoin will be mined approx on 2140. You can read more about this here.
“Mining is the process of adding transaction records to Bitcoin’s public ledger of past transactions (and a “mining rig” is a colloquial metaphor for a single computer system that performs the necessary computations for “mining”.
Mining is also the mechanism used to introduce Bitcoins into the system: Miners are paid any transaction fees as well as a “subsidy” of newly created coins. This both serves the purpose of disseminating new coins in a decentralized manner as well as motivating people to provide security for the system. (Source:en.bitcoin.it).
Bitcoin mining is done by specialized computers.The role of miners is to secure the network and to process every Bitcoin transaction.
Miners achieve this by solving a computational problem which allows them to chain together blocks of transactions (hence Bitcoin’s famous “blockchain”).
For this service, miners are rewarded with newly-created Bitcoins and transaction fees. In the beginning, 50 BTCs (BTC) were given as a reward for mining a single block to miners, valued at roughly $483,000 today.
Since then, mining rewards have been halved about every four years. Miners currently receive 12.5 BTC (roughly $120,800) only for validating blocks.You can see more about this fascinating world of mining crypto here: buybitcoinworldwide.com
(Source: thecryptograph.com)
Here is a video about miner’s life from 2013 to 2017, its not updated but it will make you see a very intimate point of view of their daily life.
There are many theories regarding this scenario (which is missing a lot of time) however I think the most reliable to the reality of the crypto world is this:
Bitcoin miners are awarded with transaction fees, and these fees should keep Bitcoin afloat (because miners will make sure the blockchain works). As the price of bitcoin increases over time (basically because Bitcoin has a finite number of coins), the fees allocated per each transaction will also increase, so in consequence, being a bitcoin miner will continue being profitable.
Eventually, these transaction fees should become valuable enough that it will encourage miners to keep on mining. So while new BTCs will cease, bitcoin miners will still get paid. Of course, some miners will be (and already are) pushed out of the market. (Source:cryptocoinmastery.com)
Therefore, the 21 million bitcoin that are already in circulation will have a progressively higher price over time and I think it will be commonly used in systems such as lightning network to massify transactions of small amounts of money.
On the other hand, I’m sure many people are going to accumulate fractions or whole amounts of bitcoin in cold wallets to use it as an economic backup, just like gold now.
Do not be surprised that countries that are mining BTCs like China use it as part of the national reserve treasure to protect themselves economically. Apart from China, Georgia and United States has the biggest amount of bitcoin. Read more about this here.
- The BTC will not disappear as soon as they finish mining it. On the contrary, the BTC blockchain will be increasingly profitable and therefore technically it will be perfected.
- In the content of this article I have not included information on the hardware used since there is a lot of variety and each time it comes out better versions. But that if this hardware will be more and more expensive. The other very important factor is the cost of electric power, which will determine if mining BTC is really profitable. This cost depends a lot on the country in which you find yourself.
- It is very important that systems such as lightning network be perfected and scaled globally to have a close and accessible alternative for all types of users.
Published at Wed, 17 Jul 2019 22:14:16 +0000
Bitcoin Pic Of The Moment
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By antwerpenR on 2013-10-13 09:24:46
