mining profitability – What’s the incentive for persevering with to mine bitcoin as we get very near the 21 million cap?


The Investopedia article on Bitcoin explains the Bitcoin issuance schedule and the way it’s halved each 4 years. At present, roughly 18.5 million have been mined, with the entire cap being 21 million. It is assumed that the final Bitcoin will likely be mined within the yr 2140, which is clearly fairly a methods off.

Given each the financial and power value of mining Bitcoin (the 2 are associated because it requires a considerable amount of computing energy), is not there a diminishing incentive to proceed mining Bitcoin as we method the hard-cap restrict of 21 million bitcoins? In different phrases, as the provision of Bitcoin nears its cap, and the reward for verifying transactions is halved, what’s going to incentivize people to proceed mining Bitcoin if their odds of verifying a transaction earlier than anybody else decreases? And on the off likelihood that they do it first, the reward will likely be miniscule. Investopedia touches on this:

Essentially, because the yr 2140 approaches, miners will doubtless spend years receiving rewards which might be really simply tiny parts of the ultimate bitcoin to be mined. The dramatic lower in reward measurement might imply that the mining course of will shift fully nicely earlier than the 2140 deadline.

Observe-up query: Could not this result in a monopoly scenario the place fringe miners hand over fully and solely the most important mining networks reap the earnings of continuous to mine Bitcoin?

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