“What? But we thought there is going to be an unlimited supply of Bitcoins?” That’s the kind of response I get when I mention about Bitcoin numbers to people.
First off, you need to know there is a limited supply of Bitcoin that will ever be mined which is 21 million ONLY, to be exact! The last Bitcoin will be mined in the year 2140.
But, according to the rate Bitcoins are being mined today, with the increase of hashpower using some of the worlds most powerful Bitcoin mining machines, AND with an increase in bitcoin miners that have joined in mining scene, we may see this 80% rate hit even sooner than 2018.
Look at this chart…
According to a recent release from Bitcoin.com and data shared by Blockchain.info, Bitcoin’s mining distribution has changed quite a bit since the early days. Over the past five years, it shows there are now more mining pools than ever. More recently, an assortment of smaller mining pools have entered the game. Charts show roughly 20 different mining factions command the hashrate distribution in 2017.
In January of 2018, 80% of all 21 million BTC will be mined and brought into circulation. A significant milestone that should not be overlooked by any means.
Did You Know?
China mines the most bitcoins and therefore ends up “exporting” the most bitcoins. Electricity in China is very cheap and has allowed Chinese Bitcoin miners to gain a very large percentage of Bitcoin’s hash power. It’s rumored that some Chinese power companies point their excess energy towards Bitcoin mining facilities so that no energy goes to waste.
China is home to many of the top Bitcoin mining companies: F2Pool, AntPool, BTCC, and BW. It’s estimated that these mining pools own somewhere around 60% of Bitcoins hash power, meaning they mine about 60% of all new bitcoins.
Georgia is home to BitFury, one of the largest producers of Bitcoin mining hardware and chips. BitFury currently mines about 15% of all bitcoins.
It is quite interesting to think about how far bitcoin has come since its inception. With a hard limit of 21 million BTC to be generated by 2140, a lot of people assume there are still a lot of coins to be mined for the next few years. While that is true up to a certain extent, we are getting closer to 80% of the finite supply being brought into circulation already. Said milestone will take place roughly 365 days from now.
It remains a bit unclear as to what this will mean for the price per individual BTC, though. As mining becomes more difficult and less profitable unless continuous new investments take place, the price per existing bitcoin should go up in value. Moreover, with “only” 4.2 million coins to be generated after January 2018 = over the course of nearly 122 years – the demand for bitcoin should increase as well. However, neither of these factors are a given, as the cryptocurrency market does not operate like more traditional models.
At the same time, the 80% milestone could force some miners to shut down their operations. We have seen some major mining difficulty spikes over the past few weeks, and that trend will continue for quite some time. A higher mining difficulty requires more hashpower and electricity to mine the same amount of bitcoin. For a lot of miners, January 2018 may become a good time to call it quits once and for all.
Should that happen, however, things will become even more intriguing. If there were fewer miners, it is expected the mining hardware manufacturers will take an even larger stake in the bitcoin mining process. Companies such as Bitmain and Bitfury have brought a lot of mining hardware online over the past few years. With more energy-efficient hardware still being developed, it is not unlikely a certain degree of centralization will occur in the mining world.
One of the lingering questions being asked aloud is whether or not we will ever see 100% of bitcoin’s entire supply be mined to begin with. The final 5% could prove to be challenging, as the trade-off between costs and earnings will make it seem far less attractive to do so. It will take a very long time to mine the 21st million BTC, that much is already a given at this point. In fact, most people alive today in the bitcoin world will never that happen.
The coming year could become a very important one for Bitcoin as a whole. Albeit there are no guarantees or certainties, once 80% of the supply is mined, things will change eventually. Whether that will be in positive or negative fashion, remains unknown at this point. We live in very exciting times, especially when one has grown fond of the concept of bitcoin and cryptocurrency.
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