It has been a little more than a decade since bitcoin has arrived. In a very short period, this cryptocurrency has predominantly established its existence globally. There have been some very drastic changes in bitcoin prices as well. We have witnessed how volatile the bitcoin value can be. The cryptocurrency holds many rewards and punishments depending upon your knowledge of bitcoin and how you choose to use it.
Although, the benefits that you gain from bitcoin investment and transactions, are way more than the associated drawbacks. You can carry out these transactions on websites to learn how to trade bitcoin profitably. We know that growth is stable and progressive when it occurs in a slow but steady fashion. Bitcoin has shown rapid growth which raises questions about its stability in the future. In this article, you will learn about the life of bitcoin and how long is it going to survive.
How does bitcoin mining affect its lifespan?
- The data regarding bitcoin transactions occurring in the market are stored in a decentralized ledger called the blockchain. There are miners out there who solve complex mathematical algorithms to mine bitcoins for these transactions to keep them verified and secured. These miners get bitcoin rewards for successfully verifying each block of a blockchain.
- During the initial launch of bitcoin, miners were rewarded 50 bitcoins. In 2012 itself the reward was cut to half and the miners received 25 bitcoins. Gradually, with time the reward keeps on decreasing to half every four years. As of 2021 February, miners receive 6.25 bitcoins for each block mined.
- The reward is supposed to follow regressive inflation until the final bitcoin, after which there would be no more rewards. As per statistics, it is anticipated that the final bitcoin will be mined around the year 2140. However, there always remains a chance of the protocols getting changed or reformed in-between.
- As per the timeline, the majority of bitcoins have already been mined. Although, as simple as it may sound, the mining process is much more complex and can experience any sort of change at any time.
- For a fact, there are only 21 million bitcoins that can be mined. Once the entire amount has been mined, the supply will get exhausted. This will leave no more bitcoins to be mined unless a protocol allows the entry of a larger supply.
- Even after the last bitcoin is mined, the miners will actively continue to validate more transactions as they receive a fee associated with it. This fee is extremely high and has shown an exponential increase with the passing years. As we can see that the value of bitcoin has increased, there would also be a subsequent rise in the fees. The fees would then be considered as taxes and this system might work as a closed economy.
- Other associated factors impact the stability of bitcoin. The environmental impact caused due to bitcoin mining is one drawback, making cryptocurrencies less desirable. The mining process requires highly powerful computers to solve complex mathematical puzzles that in turn consume a lot of energy.
Statistically, if we follow the trend in which bitcoin mining occurs then we can come to an inference that the life of bitcoin might end by the year 2140. The bitcoin community has seen a lot of drastic changes in a very short time, and what lies in the future is very unpredictable. Under such circumstances, we can say that there might be certain changes and other impacting factors that can reform the mining process. Bitcoin is still a decentralized mode of currency. If at all it gets centralized to some extent or starts getting regulated by an authority, then the life span will experience a change different from what is predicted.
Conclusion
In simple words, we can say that there is an equal possibility of bitcoin getting exhausted and extinct in the coming future, or there might be a reform that can cause an even greater rise in bitcoin prices.
