GERMANY. Bitcoin’s money supply is limited. A total of 21 million coins are available and one day the last coin will come into circulation. After algorithmic money supply growth, this won’t happen anytime soon – in 2140. But what does this mean for users and investors? What happens when the last coin is spent?
What prospects await the market when the last bitcoin is mined?
Of course, BTC will remain the number one digital currency in terms of capitalization for the near future. When bitcoin becomes widely used and recognized by most countries at the state level, it should stabilize even more and the price of the coin will increase. Since the cryptocurrency is not prone to inflation, the BTC rate will continue to rise even after the issuance of new coins ends.
In addition, a few changes are to be expected when using Bitcoin:
- If a profit is now available for each mined block and separately for each transaction, then only the transfer fee remains when coin generation is complete
- Bitcoin price increase: The smaller the cryptocurrency supply, the more prices are expected for it
- The higher the cost of BTC, the more users are interested in maintaining the network, even taking into account the consumption of energy and expensive equipment for these purposes.
It is still too early to predict how much Bitcoin will cost when its reserves run out and who will benefit from investing in cryptocurrencies. All traders can do is stay informed about the latest cryptocurrency rates and always trust platforms like bitcoin-loophole.io/en/ to avoid potential scams.
Bitcoin limit – what conclusions does this lead to?
Perhaps some news will not please users. Layer 1 transactions with BTC are likely to become more expensive as usage increases. However, this does not mean that the project will be completely closed. On the contrary: the more people use Bitcoin, the better. In the future, day-to-day transactions will likely increasingly be processed in Layer 2 applications.
While the increased transaction fees don’t sit well with most users, many will be looking for alternatives to expensive on-chain transactions. For example, not all cups of coffee need the security offered by Layer One transactions. However, if you want to send huge sums across borders in the shortest possible time and want to rely on the highest possible security, you will not hesitate to use blockchain. Compared to traditional transactions of similar value, such as gold or fiat currency, BTC is likely to remain a cheaper alternative in the future.
Is it possible to change the hard cap of Bitcoin?
The upper limit of bitcoin is known as the hard cap. It is encoded in Bitcoin source code and used by network nodes. Bitcoin’s hard capitalization is central to its value proposition, both in monetary terms and as an investment.
Bitcoin is a successful store of value precisely because it is difficult to increase its supply. This concept recalls that of precious metals or diamonds. Thanks to the halving every four years, Bitcoin becomes harder and harder to mine, and over time it becomes impossible.
Some bitcoin experts are of the opinion that since bitcoin is software, the rules of the bitcoin network can be easily changed. This means that as the block subsidy – the number of new bitcoins minted in each block – decreases every four years, users devoting resources to minting new bitcoins will seek to protect their revenue streams by pushing the limit. offer above 21 and increasing millions of bitcoins. . However, this change is not possible for various reasons.
The thing is, Bitcoin’s hard limit is protected from change by both the incentive system and the governance model. Thanks to the BTC architecture, users who control the Bitcoin ruleset have a strong incentive to resist changing the limit, while those who wish to change it do not have the ability to control the network.
Changing bitcoin’s hard cap may temporarily increase revenue for some users. However, this would destroy Bitcoin’s main investment thesis – its scarcity. For many investors, Bitcoin’s appeal lies precisely in its predictable fixed supply.
Organizations like Fidelity Investments and BlackRock also cite Bitcoin’s scarcity as one of the main reasons for its growing value. Loss of confidence in the Bitcoin network will lead to a catastrophic and irreversible price drop, leading to loss of net income for all types of users.
The suggestion that Bitcoin’s hard cap might change is based on deep misconceptions about Bitcoin as a distributed network. First, there is not one but hundreds of versions of the Bitcoin source code. Each node in the Bitcoin network runs independent software that rejects all invalid blocks.
While many nodes are using the latest version of Bitcoin Core, a significant number of nodes are still using older versions. So, although Bitcoin Core’s source code can be modified, it is much more difficult to convince tens of thousands of nodes to accept these modifications.
Since the limit on the total number of bitcoins issued cannot be changed, investing in this cryptocurrency appeals to many types of users. For those who still have little understanding of how this system works, it is not too late to familiarize themselves with various materials that will help them get started in the field of investing.
Bitcoin in 2140: how to adapt to the situation?
While it’s impossible to reliably predict what will happen after the final coin is released in 2140, some useful conclusions can be drawn today. Due to the transparent structure of the cryptocurrency’s open source code, it can be assumed that any difficulties related to the drop in Coinbase rewards can be identified early and avoided.
Moreover, the growing importance of transaction fees can already be observed today. This means that 2022 users have enough time to adapt to the new circumstances.