Snoop Dow

How many bitcoins are there?

Cryptocurrencies have become incredibly popular over the last few years, but 2021 saw the amount of attention soar. At the forefront of this has been Bitcoin (BTC). Since its inception in 2009, Bitcoin has taken the global economy by storm, ushering in a new way to engage in financial transactions.

But, what’s unbeknownst to a lot of people is that Bitcoin is a finite cryptocurrency. Unlike fiat currencies, you can’t just issue more to be printed or made. What may be even more surprising is that over 90% of the Bitcoin supply is already in existence.

However, it’s not time to panic just yet if you haven’t got your hands on some BTC. We’re still a way off from hitting the maximum supply limit, but we will continue to see slower and slower increases in Bitcoin circulation until then.

That’s what we’ll explore in this article. We’ll cover what Bitcoin is, how many Bitcoins there are, how many there are left, and what might happen once Bitcoin supply runs out.

How many bitcoins are there?

The maximum total supply of Bitcoin is 21 million. Of that 21 million, there are currently over 19,024,581.25 Bitcoins in circulation, and there are 1,975,418.75 Bitcoins left to be mined. This means that over 90% of all Bitcoins are already in existence in terms of the total supply.

On average, about 144 blocks are mined per day. And since there are 6.25 bitcoins per block, there’s an average of 900 new Bitcoins that enter circulation each day.

What is Bitcoin?

Bitcoin is a virtual currency created in January 2009 by the anonymous ‘Satoshi Nakamoto’. Satoshi’s identity has never been revealed, and although there are numerous theories out on the internet about who is behind the creation of Bitcoin, to this date, the identity of the creator(s) is unknown.

Your typical currencies, such as the United States Dollar (USD) or the Euro, are printed by a government authority. For instance, the British Pound Sterling (GBP) is printed and regulated by the Bank of England, which means that the currency is centralised, and the governing body is able to make changes as they see fit. On the other hand, Bitcoin is entirely decentralised. This means that no financial institute has control of the currency.

As a digital currency, there are no physical coins or notes, with all Bitcoin balances kept on a public ledger that is accessible to everyone. However, these balances are kept secure using encryption and cryptography, hence the name cryptocurrency. Bitcoin is often credited as the first of its kind and has since paved the way for thousands of other cryptocurrencies such as Ethereum, Cardano, and Ripple.

What is Bitcoin mining?

Bitcoin mining is the process by which more Bitcoin is ‘unlocked’, or released into circulation. It requires solving very complex computational math puzzles, and it is an extremely hardware and resource-intensive process. For every problem that is solved, a Bitcoin block is processed. The first computer to find the solution adds the block to the blockchain and receives mining rewards. This reward is currently at 6.25 bitcoins and the accumulation of transaction fees for that block. They then receive a new block to solve, and the process is repeated again.

The process of guessing the correct number (hash) to the problem is known as ‘Proof of Work (PoW). Bitcoin miners guess this hash by making as many guesses as they can, as quickly as they can. At any given moment, there are over 1 million miners working on this puzzle. As you can imagine, in order to be the first, it requires substantial computing power. The computer hardware used is known as application-specific integrated circuits (ASICs).

ASICs are incredibly expensive and can cost up to $20,000 for the top of the line mining rigs. These application-specific integrated circuits are highly energy-intensive since it takes vast amounts of electricity to power these things. As a result, the mining process has come under fire from environmental groups.

When will all Bitcoins be mined?

Those who mine Bitcoins are rewarded with new Bitcoin. But for every 210,000 blocks that are mined, these block rewards are cut in half, also known as Bitcoin halving. Since blocks take 9.5-10 minutes to mine on average, this means that Bitcoin halving happens every four years. There will be 64 total halvings, and after the 64th one, there will be no more bitcoins left to mine. At the current rate, this means that all 21 million remaining Bitcoins will be mined sometime in the year 2140.

Can more Bitcoin be made?

Bitcoin’s founder, Satoshi Nakamoto, put a hard cap on the Bitcoin supply. With a maximum limit of 21 million, once all the Bitcoins have been mined, that’s it. No more can be made. Unless the source code of Bitcoin is altered.

If stakeholders decide to change the code and increase the maximum limit, we could see an increase in supply, but this is only if the majority agrees, which is extremely unlikely. Whilst it is still certainly a possibility that cannot be ruled out, it’s a decision that could hugely impact the cryptocurrency, making it a controversial topic.

Incentives to increase the total Bitcoin supply

Bitcoin mining is immensely popular and currently stands to be a huge incentive to increase Bitcoin supply – to continue mining and be rewarded with more Bitcoin. This incentive keeps miners mining and therefore plays a vital part in keeping the entire ecosystem working since, without the miners, a new block won’t be added to the blockchain.

The counterargument to this is that transaction fees will increase as Bitcoin block rewards keep halving. Currently, transaction fees make up around 6% of the revenue for miners, which is relatively low. Even though this will undoubtedly increase, those who are mining aren’t satisfied with the answer. Understandably, they would like to see supply raised further – albeit for personal gain.

What happens after all 21 million Bitcoin are mined?

Once the maximum limit of 21 million Bitcoins has been reached, there will be no additional Bitcoins added. It’s the final amount of Bitcoins that will be in existence – unless stakeholders reach an unlikely consensus. However, all transactions will still have to be pooled and processed via mining. But without a block reward, who will continue mining? Well, in order to incentivise miners to continue doing so, they will likely be rewarded with higher transaction processing fees. It’s hard to say if this will be profitable for them, though.

What will happen to miners?

Miners are almost like the backbone of Bitcoin, and they play a crucial role in solving cryptographic puzzles. A block of transactions in the network then gets verified, validated, and added to the blockchain by solving these puzzles. For their efforts, miners are rewarded by being given new Bitcoins, and they are also given the transaction fees that accumulate in that block.

Currently, Bitcoin rewards are halved every four years, which presents a bit of a problem. In 2009 at the beginning of Bitcoin’s release, miners were issued 50 Bitcoins for each block. In 2012 this was halved to 25, then down to 12.5 in 2016, and then down again to 6.25 in 2020, which is where it currently stands. Using energy-intensive hardware to mine means that operational costs are high, but at the current market value of Bitcoin, miners can still make a profit off the practice. However, this may change going forward. If the Bitcoin rewards keep halving every four years, it may get to a point where mining becomes unprofitable.

To combat this, transaction fees will rise accordingly to compensate miners. But the feasibility of relying on transactions will depend on the state of the network – whether there are enough transactions occurring to make the payout worth it. Of course, becoming more energy efficient would also make mining more sustainable, but as it stands, no new innovations have been made on that front.

If mining becomes unprofitable, we could see miners forming cartels. This is where groups of miners work together to ask for higher transaction fees and where they also control mining resources – it would be akin to what we see in the diamond industry.

What will happen to the Bitcoin network?

Clearly, the network is the most important aspect of Bitcoin. But changes could alter the course of how the network operates. If the number of transactions in the network increases, there’s a possibility that the speed of transactions will drastically slow down. Bitcoin has always valued accuracy over speed. This can be shown by new blocks being processed every 10 minutes or so. Conversely, the cryptocurrency Solana processes new blocks at a rate of 590 milliseconds.

However, if the number of transactions decreases, we may see Bitcoin become more of a reserve asset. This will have the effect of attracting large institutional traders and pushing out smaller retail traders, which will probably increase transaction fees by a considerable amount.

What will happen to Bitcoin investors and HODLers

The limited supply of Bitcoin naturally attracts HODLers – those who are looking to hold the currency instead of using it transactionally – and those who see it as an investment commodity and thus, keeping Bitcoin prices high. This usually decreases supply further, which further reinforces Bitcoin’s price.

What will happen to institutional investors?

We are seeing more and more companies test the waters of cryptocurrencies. For example, in 2021, we saw Elon Musk’s Tesla delve into the world of crypto by accepting Bitcoin payments. Since Bitcoin is a finite and scarce resource, it is gaining traction among institutional investors as they look to use Bitcoin as a way to hedge against rising inflation. As such, Bitcoin is being looked at as digital gold by these investors who are hoping that low supply will not only maintain Bitcoin’s price but increase it.

What will happen to governments?

It’s safe to say that most governments haven’t quite figured out how to deal with Bitcoin and cryptocurrencies in general. Currently, El Salvador is the only country in the world to accept Bitcoin as legal tender. We may not see many other countries join this list, but we’ll undoubtedly see governments adopt Bitcoin and other cryptocurrencies. However, since Bitcoin is decentralised, as most cryptocurrencies are, we can certainly expect to see heavy regulations on its use.

How many Bitcoin are lost?

Recent estimates show that up to three to four million Bitcoins may be lost forever. One of the methods used to give an estimate is looking at how many Bitcoins have sat in a wallet unmoved. Having said that, it’s difficult to determine whether a Bitcoin has been lost or not since on the blockchain, it all looks the same.

There’s also been news coverage of wallets with large amounts of Bitcoin that are completely inaccessible because the owner has lost its key. Since Bitcoin is decentralised, there’s no governing body you can contact to resolve this – if you forget the key to your wallet, you’re out of luck. Unless you somehow remember your key again, your wallet will be virtually impossible to recover.

Knowing this, when we say that there are over 19 million Bitcoins in existence, only about 15-16 million are in circulation. By the time all 21 million Bitcoins are mined, there’ll most likely be even more lost Bitcoin which will mean that we’ll have much less Bitcoin available than we might think.

Final thoughts

Currently, over 19 million Bitcoin have been mined, meaning over 90% of the total supply. Bitcoin was initially created to hit its maximum supply limit of 21 million sometime in 2140 so we most likely won’t see that limit hit in our lifetime. But whilst there is a possibility that stakeholders will decide to increase the hard cap, it is not very likely; such a decision would have a massive impact on the cryptocurrency economy, and it would require a majority agreement.

The popular theory is that once all the Bitcoin has been mined, it will be used as an investment commodity such as gold and will be hoarded instead of traded. But this is just speculation; it’s hard to accurately predict what might happen. The Bitcoin ecosystem will continue to evolve until that hard cap is hit, and we still have quite a long way to go.

Exit mobile version