Today it is impossible to go through a day of our life without coming across at least once something related to Bitcoin. It is simply impossible. It is a subject that generates fascination and rejection in equal parts, and has earned a place on the global daily agenda. Thus, we find people who only care if the price goes up or down, while others claim to be more interested in the technology that powers it and not in its price. Simultaneously, there is no lack of those who still argue that it is a bubble or a pyramid scheme, nor those who wait for the red numbers of each downward cycle to dust off the banners of “Bitcoin is dead”. In the middle there are maximalists, curious, opportunists, speculators and worthy of who knows what other adjectives.
The truth is that, for a long time, Bitcoin has ceased to be a topic that only attracts the attention of a niche audience. Therefore, it is logical that more and more people are taking their first steps in the world of cryptocurrencies. According to a survey, almost half of those who own crypto assets made their first purchase in 2021. While regions such as Latin America have seen an explosion in its adoption, especially in countries with very unstable economies; either to escape devaluation, as is the case in Argentina, or to simplify the sending of remittances, such as the cases of Venezuela and El Salvador, to name a few.
Thus, it is good to refresh some basic concepts that do not lose relevance. In this case we will focus on Bitcoin, but on aspects that go beyond the price of the day or the causes and effects of its volatility. Specifically, we will focus on the issuance of this cryptoactive and in sustaining mining over time.
More than 100 years of Bitcoin mining ahead
Bitcoin is a finite digital asset. Since its creation it has been established that only 21 million bitcoins will be issued and that cannot be changed. They will actually be almost 21 million, since the final amount to be mined will be 20,999,999.9769 bitcoinsif we want to be truly precise with the data.
Now, the “peculiar” thing is that Almost 91% of possible bitcoins have already been mined. As reflected CoinGecko, at the time of writing this article there are 19,081,612 BTC in circulation. This means that there are less than 2 million bitcoins left to be mined. Something that is not accidental, but premeditated.
Bitcoin is still a tremendously young asset. The white paper by Satoshi Nakamoto was unveiled in 2008, while the first version of the software was released in early 2009. This means that the world’s largest cryptocurrency, which today has a market capitalization of more than $360 billion, He is only 13 years old.
So, having established that more than 90% of the available BTC is already in the market, how is it possible that there is still more than a century of mining to be done? Because the system has been designed to reduce their emission and rewards to miners every certain amount of time. Thus, it becomes more difficult to solve the code “riddles” that allow validating new blocks in the blockchain; therefore, the extraction of new bitcoins becomes more complex and slow.
Therefore, it is estimated that the last Bitcoin will be mined in the year 2140..
The ‘halving’, a key piece in this story
In previous lines we mentioned that Bitcoin has been designed to reduce its quantity and speed of issuance. This is known as halving and it happens exactly every 210,000 blocks, in a period that occurs approximately every four years.
In English, halving it means “halve” and that is literally what happens with Bitcoin. When it happens, for each new block mined, half the bitcoins are issued than in the previous stage.
In 2009, for every block added, 50 BTC was generated. The blockchain reached 210,000 blocks in November 2012, and from there 25 BTC per block began to be mined. As of July 2016, when block 420,000 was mined, the reward for miners was reduced to 12.5 BTC; while in May 2020, with the arrival of block 630,000, it fell to 6.25 BTC.
The next halving will happen when Bitcoin reaches block 840,000, which is estimated to happen in 2024. It is worth mentioning that, currently, the blockchain has just over 743,000 blocks and adds a new one every 10 minutes. The “halvings” will continue automatically, up to the point where the reward for creating a new block will be one hundred millionth of a Bitcoin (0.00000001 BTC), which is currently known as 1 satoshi.
Once the mining of the 20,999,999.9769 bitcoins is complete, miners will no longer receive rewards for mining new blocks. This does not mean that the Bitcoin blockchain will stop or that the miners will disappear, but that the generation of income will be limited to the commissions received by validate transactions of the users. And all blocks generated from then on will include only the transactions in question.
Some concerns for the future
The energy consumption of Bitcoin is an issue that has generated much controversy and concern in recent years. The need for an increasingly high computing power for the permanent execution of a cryptographic algorithm under the modality Proof-of-Work It has led to Bitcoin requiring an energy level equivalent to that of entire countries.
The big question is what will happen as each halving the extraction of new bitcoins becomes more complex and slow. Several governments have already expressed their concern regarding this issue. And while there are initiatives to mine using only clean energy in 2030, nobody really believes that this can happen; Not in that timeframe, at least.