Key takeaways:
- Block 714,000 marks 90% issuance of the total Bitcoin supply
- Bitcoin has an artificially set total supply capped at 21 million coins
- The last bit of Bitcoin supply is projected to be mined in 2139
Bitcoin reached a historical milestone on Monday – with the completion of block 714,000, precisely 90% of Bitcoin supply has been mined. While it took only 12 years to create the vast majority of coins that will ever exist, the last BTC is projected to be mined in 2139.
With each Bitcoin halving, the computational power required to create new BTC significantly increases, while the mining rewards get halved
Bitcoin network utilizes a so-called Proof-of-Work (PoW) consensus mechanism, which requires exuberant amounts of electricity to process transactions on the blockchain and keep the network secure.
To make the Bitcoin network secure and impenetrable to attackers, Bitcoin miners are tasked with solving mathematical problems linked with each block. In short, a block is a part of the blockchain with immutable records of past transactions made on the BTC network. Once a new block is produced, the first transaction recorded is the BTC reward given to the miner that completed (solved) the new block. As of the last Bitcoin halving that took place in May 2020, each block creation is awarded with 6.25 newly minted BTC.
It is worth noting that Bitcoin rewards get halved with each Bitcoin halving, which is a scheduled event integrated into the blockchain that drops mining rewards by 50% on a periodic basis in order to cut inflationary monetary effects and slow the rate at which new coins enter circulation. Bitcoin will undergo 32 halvings throughout its life cycle, with the last one dropping the block reward to zero. From that point on, BTC miners will no longer receive new BTC for their efforts but will be instead incentivized to provide their computational capabilities with earning transaction fees.
The computational power of crypto miners participating in the process of securing the network is called Bitcoin hashrate, and it is measured in exahashes per second (EH/s). The Bitcoin hashrate experienced wild swings throughout 2021 – it reached the all-time high of 198.51 EH/s on April 15, dropped to a two-year low of 57.47 EH/s following China crypto mining crackdowns in June, and recovered close to its ATH earlier in the month.
To mitigate the effects of BTC hashrate fluctuations, mining difficulty automatically increases when the hashrate is high and, vice-versa, decreases when the hashrate drops. Thanks to these mining difficulty adjustments, the future BTC supply can be projected with a high degree of certainty even on time scales longer than 100 years.
According to blockchain expert and Bitcoin on-chain analytic Clark Moody, we will see 5% of BTC supply mined in the next four years. However, due to the exponential difficulty of solving each subsequent Bitcoin block, the remaining 5% of the BTC supply will be mined by 2139.
Per Moody’s helpful Bitcoin dashboard, it will take a whopping 91 years to mine the last 0.1% of BTC supply.
While the past 30 days have been rough for crypto markets and Bitcoin, the world’s oldest digital currency is still up more than 70% since the start of the year.
