How will bitcoin continue to run after the mining of the last block in 2140

Introduction

Bitcoin is not only a revolutionary digital currency but also an experiment in scarcity. Unlike traditional fiat currencies that can be printed indefinitely, Bitcoin’s supply is capped at 21 million coins. This built-in limitation is what makes Bitcoin deflationary by nature, with the last Bitcoin projected to be mined around the year 2140. This cap serves as a key factor in its value proposition, creating scarcity over time and fostering an economy around digital assets. However, this raises important questions about what happens when no more new Bitcoin can be created. In particular, how will the Bitcoin network continue to function, and how will miners, who are currently incentivized by block rewards, sustain their operations? These questions are fundamental to understanding the future of Bitcoin’s ecosystem.

As of now, miners play a critical role in maintaining the Bitcoin network by verifying transactions and securing the blockchain. They are rewarded with newly minted Bitcoin for adding blocks to the chain, alongside transaction fees. However, when the 21 millionth Bitcoin is mined, block rewards will cease, and miners will only receive transaction fees. This shift raises concerns about whether this will be sufficient to keep miners incentivized and the network secure. Thus, the transition from an inflationary model (where new Bitcoin is continually created) to a deflationary model (where the total supply remains constant) presents both challenges and opportunities for the future of Bitcoin​

What Will Happen in 2140?

In 2140, the Bitcoin network will undergo a major transformation as the last block is mined and no new Bitcoin enters circulation. This event marks the culmination of Bitcoin’s finite supply, which has been slowly approaching the 21 million cap due to its halving cycle. Approximately every four years, the Bitcoin block reward, or the number of new Bitcoins created per block, is reduced by half. Initially set at 50 BTC per block in 2009, it currently stands at 3.125 BTC following the most recent halving in 2024. The reward will continue to decrease until it becomes infinitesimal, eventually reaching zero​.

Once the final Bitcoin is mined, the network will continue to operate, but with a significant change: miners will no longer receive block rewards and will instead rely solely on transaction fees for revenue. This creates uncertainty around whether transaction fees alone will be sufficient to incentivize miners to continue securing the network. Currently, block rewards make up the bulk of miners' income, with transaction fees contributing a much smaller portion. As Bitcoin’s value increases and adoption grows, transaction fees are expected to rise as well. This could potentially offset the loss of block rewards, ensuring that miners remain profitable​.

In addition, Bitcoin’s difficulty adjustment algorithm plays a role in maintaining network security. This algorithm ensures that blocks are mined approximately every ten minutes, regardless of how many miners are participating. If the number of miners decreases due to unprofitable conditions, the difficulty of mining new blocks is adjusted downward, making it easier for remaining miners to add blocks to the chain. This self-regulating mechanism is one of the reasons many believe that Bitcoin will continue to function efficiently even after all 21 million coins are mined​

Moreover, the rise of second-layer solutions like the Lightning Network and Stacks. which facilitates faster and cheaper transactions, could also help manage the pressure on block space and transaction fees, allowing Bitcoin to remain a viable network for both large and small transactions​.

Theories on What Will Happen After 2140

There are several theories about what might happen to Bitcoin after 2140, reflecting both optimism and uncertainty:

1. Transaction Fees as Primary Incentive: The most widely accepted theory is that transaction fees will provide sufficient incentive for miners to continue operating. As Bitcoin becomes more valuable and widely adopted, the volume of transactions is expected to increase, which could drive up transaction fees enough to sustain miners. This scenario is contingent on high demand for Bitcoin transactions and technological advancements that make mining more efficient​
2. Bitcoin as a Store of Value: Some speculate that Bitcoin may transition into a pure store of value, much like gold, with fewer transactions but substantial worth. In this scenario, users may hold Bitcoin for long-term investment, making transaction fees potentially higher but fewer in number​.
3. Hyperbitcoinization: Another theory envisions a future where Bitcoin replaces fiat currencies entirely, becoming the standard global monetary system. In this case, Bitcoin’s value could be measured by its purchasing power relative to energy or goods, making transaction fees more significant as the primary means of incentivizing miners
4. Technological Shifts and Adaptations: Some theorists believe that by the time 2140 arrives, technological advancements—such as quantum computing—might force significant changes to Bitcoin’s underlying protocol. This could involve altering Bitcoin’s security mechanisms or even changing the 21 million supply limit if the community deems it necessary for the network’s security.

Conclusion

While the mining of the last Bitcoin in 2140 marks a significant milestone, it does not signify the end of Bitcoin as a functioning system. Miners will rely on transaction fees for revenue, and the network will continue to adapt through technological advancements and shifting economic models. The future of Bitcoin post-2140 remains uncertain, but its decentralized nature and the ingenuity of its design suggest it will find ways to remain secure and valuable well into the future.