Are miners loaded with Bitcoins in their wallets? Some of them might be, but it depends on their overall monthly costs. For the majority, the income they earn solely from transaction fees does not reimburse them for all expenses associated with mining.
The two main mining costs associated with mining are the electrical bills and expenses for hardware upkeep. Most miners are urged to sell the amount of Bitcoin they earn with mining in order to end up with a profit each month.
Armed with the knowledge that the total supply of Bitcoin is limited, the next obvious thought comes to mind: Bitcoin has a fixed total supply of 21 million, and when miners continue to generate new Bitcoins each day, sooner or later all of the Bitcoins in existence will be mined, and the total supply will be tapped out. What happens then? Before continuing with the answer, bear in mind that, throughout this report, we presume there is no change to Bitcoin’s protocol. A fundamental change to its protocol could lead to an increase in the total supply of Bitcoin (which, in my opinion, is highly unlikely).
Who will still mine Bitcoin after the 21 million Bitcoin is generated?
There is a lot of debate surrounding this topic. Some investors share a pessimistic view that this will inevitably lead to the demise of Bitcoin, as miners will ultimately lose the incentive to mine. Optimists, on the other hand, believe that as we get closer to the end of Bitcoin’s total supply, the clearer its intrinsic value will become.
The last Bitcoin will be mined sometime in the year 2140.
In my opinion, miners will continue to mine Bitcoin even after its supply is depleted, though there are certain factors that should be taken into consideration.
First of all, Bitcoin’s adoption. As Bitcoin’s acceptance around the world grows, moving forward, more people will use it on a daily basis. Once Bitcoin’s adoption expands globally, it will generate a sufficient amount of transactions each day that will financially benefit miners for their work, even after Bitcoin’s supply has been drained completely.
Secondly, if we account for the future progression of technology, CPUs, GPUs, RAM and other components required to mine Bitcoin will also become more efficient and economical. This will allow miners to mine faster, more efficiently and with lower electrical costs. This will make mining, therefore, even more financially profitable after the depletion of Bitcoin itself.
These two reasons will increase the incentive for mining Bitcoin in the future. As we move closer to the exhaustion of Bitcoin’s supply, miners will eventually be urged to shift more of their primary income from mining new Bitcoins to earnings made from transaction fees.