bitcoin money supply is 21 million limited – one day the last Coin will be brought into circulation. The algorithmic money supply growth that is likely to be in the year 2140 of the case. What happens when the last Coin is gemint?
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30. October 2019BTC$9.119,46 0.27%part Facebook Twitter LinkedIn xing mail
According to the estimates of blockchain.info be sent to the Bitcoin Blockchain every day between one and two billion dollars in value; the total number of all transactions in the network is approaching 500 million. In other words: Bitcoin is growing every day.
Who sent the Bitcoin and the network rules, may assume a probability bordering on certainty, that the Miner include their transaction in one of the following blocks and digital seal. Bitcoin is for sure, without a Central authority needs to be entrusted with the Transaction submission. A crucial role is played by the miners – and the more there are, the better. However, what Miner are forced to make expensive investments in Mining Equipment, power supply, and warehouses, and the use of these costly resources, a valid hash for a bitcoin Block Header to calculate? The shortened response is: it’s worth It. Because, as a compensation for their services, miners waving both the so-called Block Rewards, as well as the transaction fees in the Block of included transactions.
However, one of the two pillars, the Block Reward, currently at 12.5 BTC per Block, and breaks away with increasing block height gradually. Until it finally arrives at a value of just under 21 million to a complete Standstill. Finally, the rate of inflation in Bitcoins every four years is cut in half.
Set the assumption that in the course of time, no new sources of income for Bitcoin Miner arise, they must be able to with the only remaining source of income a line of revenue: transaction fees. How realistic is it that the Mining a worthwhile business, remains with the Block Rewards, the aspire to zero?
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The BTC block size is- of the additional Witness data, with the exception of 1 MB. This is tight. On average, only about 2,000 to 3,000 transactions per Block can be processed. It is therefore common practice to establish the speed of the processing of a fee; those in a hurry, you should set the added transaction fees are correspondingly high, in order to create an incentive for the respective transaction as promptly as possible in a Block to integrate. In the case of BTC-transaction fees is a flexible size, a Variable, i.e., dependent on the preference profile of the user.
And exactly here lies the crux of the matter: The Bitcoin block space is a scarce commodity. You can imagine the space on the Blockchain as a kind of competition for a spatially limited Well – with all the economic laws of conventional markets. About the demand for block space, increases is to be expected with an increase in the fees since the users compete with each other for the integration of your transaction.
An increase in the transaction fees, however, is often correlated with an increase in the transaction volume. Finally, the transaction increased fees to the top of the Bull Runs to the end of 2017, up to 60 US dollars per transaction. An exceptional case, because, on average, the fees – depending on the desired speed – amount to only a few US Dollar Cents.
That is, an increasing use of Bitcoins is likely to cause the average fees rise. Because the more users of Bitcoin want to send, the higher the competition for scarce seeded block space. Ergo, with the increasing popularity of Bitcoins, is Bitcoin more expensive to use. An unusual connection, but one can hardly deny it.
transaction fees are becoming more and more important
In a few decades, when the Block Rewards are too small, the transaction fees are the main compensation for miners,
already wrote Satoshi Nakamoto himself in the bitcointalk Forum
With declining Coinbase Reward with increasing transaction fees, the relationship between the two pillars of the Mining-Finance is shifting. Currently, the ratio is significantly in favor of the Mining Rewards, however, according to data from the Awe and Wonder Fees are expected to account for already in the year 2030, about 50 per cent of the Mining-proceeds – one speaks of the so-called Cross-Over Point.
What can we conclude from that?
should First be the bad news: Layer-One transactions in BTC with the rising use of ever-more expensive. This is not to say, however, that the project has failed. On the contrary: The more people use Bitcoin, the better. Everyday transactions are likely to take place in the future, more on Layer Two applications, such as the Lightning Network.
In other words, it Should lead to rising transaction fees that users are discouraged from the failure of the project. It needs to give an Alternative to expensive On-Chain transactions; not every Cup of coffee needs the security, the Layer-One-offer transactions. But who wants to send in a very short time tremendous amounts of value across borders, and on the greatest possible safety, the will not hesitate to do this on the Blockchain. In comparison to conventional transactions similar value – such as Gold or Fiat money – is BTC is probably also in the future the cheaper Alternative.
After 2140
Whether the transaction is sufficient fees for the time after the last Bitcoin, in order to compensate miners for their services, remains to be seen. There is merit however, for the reasons stated above. In addition, the acceptance of a Coinbase Rewards is not a random event, but is on the horizon gradually. Of course, the halving of the Coinbase reward every four years is an extreme supply shock. The increase in Hash Rate in the last few months, you can recognize easily, that the Miner have the next Halving already on the paper.
What happens after the time of the last Coin Mining 2140, noisecannot reliably predict. Due to the transparent structure of Bitcoins Open Source Code is likely, however, that any difficulties which might arise in connection with a decline in Coinbase Rewards for the early detection and circumnavigated detected. An increasing importance of transaction fees, however, can already be observed today, and not until 2140 to Wear. Miner have all the time in the world, in the changed circumstances.
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