18 million bitcoins have been mined, and we don’t have much time left

The 18 millionth bitcoin has been mined, bringing the world’s first cryptocurrency one step closer to its 21 million mining cap.

According to the latest BitcoinBlockHalf data, at 08:04 Beijing time on October 19, the Bitcoin block height finally reached 600,000, which means that the 18 millionth Bitcoin has been mined, and the current circulating supply of Bitcoin has accounted for 85% of the total Bitcoin supply. This day will also become another milestone in the history of Bitcoin development, because on this day Bitcoin showed its scarcity to the world.

It’s good for people to see the progress of Bitcoin and look back at everything that’s been accomplished in the past and everything that’s going to be accomplished with the remaining 3 million. But the last 3 million is not to be ignored.

But rest assured, it will take another 120 years to mine all the Bitcoins.

01

Bitcoin Milestone

According to statistics, this historic block was mined by BitFury and the hash value is

00000000000000000007316856900e76b4f7a9139cfbfba89842c8d196cd5f91. According to BitcoinBlockHalf, by May 14, 2020 (considering the irregularity of Bitcoin block time, the time is tentative), the block reward for Bitcoin mining will be reduced from 12.5 to 6.25, and there are about 207 days left until the day when the reward is halved.

Many blockchain giants have also expressed their opinions on this milestone. Among them, cryptocurrency analyst Rhythm said that there are only 3 million bitcoins that have not been mined yet, and the number of Bitcoin miners has increased year by year. This means that in the future, Bitcoin's total network computing power will reach a historical high and will be broken again and again.

Since the block reward is halved every 210,000 blocks (or about four years), the mining rate of the next 3 million bitcoins will gradually slow down and reduce the supply of new bitcoins by 50%. The last bitcoin is expected to be mined in 2140. Bitcoin will then enter the stock circulation stage.

This also means that the competition among Bitcoin miners for Bitcoin rewards will become increasingly fierce in the future.

02

What will happen after all 21 million are mined?

Considering the value proposition of Bitcoin as digital gold, outsiders can also foresee that one day Bitcoin may be unable to breathe after the 21 million cap is reached.

Eventually, once there are no more bitcoins left for miners, miners will become entirely dependent on transaction fees, which are paid by users to transfer tokens through the blockchain. This change has raised concerns among some who believe that Bitcoin’s block subsidy is an integral part of Bitcoin’s incentive system.

To skeptics, this could undermine the ecosystem’s incentive structure for miners to record verified transactions in the ledger.

“All those assumptions about incentives, risk and value go out the window,” said Angela Walch, a researcher at the University College London’s Center for Blockchain Technologies. “Don’t assume that once everything moves to a pure transaction fee system, rather than a block reward, everything will work well.”

Similarly, Paul Brody, global innovation leader at accounting firm Ernst & Young, said Bitcoin’s limited supply could limit the cryptocurrency’s utility as a global reserve currency.

Brody noted that in situations such as the Great Depression, monetary policy interventions were needed to pull the U.S. out of economic turmoil.

“If Bitcoin is going to become an important part of the global monetary system, we’re going to need to address (the hard supply cap) because many economists agree that a deflationary system is not necessarily the best option.”

03

Prediction of Bitcoin's future value and status

Just recently, Germany's seventh largest bank, which is 75% owned by the Free State of Bavaria, released a latest report "Digital Megatrends: Is Bitcoin Surpassing Gold?", which took the scarcity of Bitcoin into account in the calculation of economic models and surprisingly stated that Bitcoin will usher in the biggest bull run in history next year, and the price will reach a new high of US$90,000 in 2020.

The report mentioned that it took gold thousands of years of effort to finally achieve its current high stock-to-flow ratio (Stock-to-Flow*), but the forecast results show that Bitcoin is likely to achieve a stock-to-flow ratio comparable to that of gold within the next year; in other words, Bitcoin has a higher scarcity than products such as gold and precious metals, and according to current market value estimates, Bitcoin should be able to achieve a high stock-to-flow ratio similar to that of gold.

It is worth noting that the report also pointed out that the value of gold is due to its lack of industrial use. This disadvantage makes the inventory flow of gold higher than other precious metals, making it the best tool for storing value. Similarly, Bitcoin has no value other than as a currency, which means that it will not be used for other purposes due to any unexpected events, making Bitcoin the best currency.