Bitcoin,  Cryptocurrencies

It’s official: 4 out of 5 bitcoins have already been mined

Now we only have to wait 122 years to finish the job

This weekend saw a major milestone passed for the cryptocurrency community with the mining of the 16,800,000th bitcoin. As the bitcoin protocol is hard-capped at a fraction under 21 million coins, this means 80 percent of the world’s total supply is already out in the wild.

We’re not about to run out of bitcoin next weekend, so don’t lose your cool just yet. The math that introduces new coins into the ecosystem gets progressively difficult as time goes on; we’re making bitcoins more slowly, not more quickly

When it first cropped up nine years ago, bitcoin’s unremarkable monetary value reflected how easy it was to generate. Nowadays that math is significantly more complicated for a computer to crunch, and bitcoin’s high-but-fluctuating price is the stuff of CNBC headlines. Increased hashing difficulty slows down the rate of production, so even though it took just nine years to mine the first 80 percent of all the bitcoin out there, people will be gathering the remaining 20 percent clear through until the year 2140.

Mining remains viable for now, but profits are generally tight. The cost of mining hardware—and the electricity to power it—is relatively high. These costs won’t change in the short run, but the time it takes for a miner to score new bitcoins will only increase. This means the incentive to continue mining will decrease.

The entire bitcoin network is propped up and facilitated by miners, so how does one reward and perpetuate this behavior as it becomes a less-profitable undertaking?

Bitcoin’s cap of 21 million is baked into the fundamental nature of how its protocol works. Cryptocurrency pundits love to talk about two mechanisms that could theoretically sway this restriction—the 51 percent attack and the Sybil attack—but neither has so far worked to manipulate the rules for how this cryptocurrency operates.

Bitcoin is the mother and icon of the cryptocurrency world, but its transaction costs are already significantly higher than those of similar coins. Today its average transaction cost is $28.09.  Compare this against Ethereum’s $2.79, Ripple’s XRP’s $0.01, Bitcoin Cash’s $0.27, or litecoin’s $0.30.

The future of keeping the blockchain alive and active may be in managing bitcoin’s rising transaction costs.

At least we’ve got more than 100 years to figure it out.

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Dylan Love is an editorial consultant, contributing reporter, and fiendishly curious technology enthusiast. He owns no cryptocurrencies.