Bitcoin Halved! What Happens When ALL 21 Million Bitcoin Are Mined?

Summary

This video explains the concept of Bitcoin halving events, which occur approximately every four years. During a halving, the reward for mining new blocks is cut in half, reducing the rate at which new Bitcoins are created. This event impacts the supply and can influence Bitcoin's price. The video details the technical aspects of mining, the fixed supply of 21 million Bitcoins, and the economic principles behind Bitcoin's deflationary nature. It also discusses the potential long-term effects on miners and the price of Bitcoin, while addressing common misconceptions and encouraging viewers to stay informed.

Takeaways

• 🌐 Bitcoin is a blockchain with its own cryptocurrency and has a fixed supply of 21 million coins, which is hardcoded and cannot be changed.
• 🔑 Mining in Bitcoin involves solving cryptographic problems to add blocks to the blockchain and earn rewards in Bitcoin.
• 💰 Every 210,000 blocks, approximately every 4 years, the reward given to miners for adding blocks is halved, known as the Bitcoin halving event.
• ⏱ The Bitcoin difficulty adjusts every 2 weeks to maintain a consistent block addition interval of approximately 10 minutes.
• 📉 The halving process will continue until 2140 when the last Bitcoin is mined, after which no new Bitcoins will be created.
• 📈 The limited supply of Bitcoin and potential loss of coins in inaccessible wallets could make it a deflationary asset, increasing its value over time.
• 💼 Miners are essential to the Bitcoin system, verifying and validating transactions, and will likely rely on transaction fees as their reward once the block rewards end.
• 🤔 The Bitcoin halving event does not require any specific action from Bitcoin holders, and their holdings will not disappear.
• 📊 Historically, Bitcoin's price has reached all-time highs a few weeks after each halving event, although this is not guaranteed for the future.
• 💡 The increase in Bitcoin's value is expected to be driven by transaction fees as the number of transactions grows and the supply becomes more scarce.
• 🏦 The involvement of big players and corporations with Bitcoin ETFs suggests a potential for continued interest and support for the Bitcoin blockchain.

Q & A

What is a Bitcoin halving event?

A Bitcoin halving event is when the reward that miners receive for adding a block to the Bitcoin blockchain is cut in half. This happens approximately every four years or after every 210,000 blocks are mined.

Why is the Bitcoin halving event important?

The Bitcoin halving event is important because it controls the rate at which new Bitcoins are created and introduced into the circulation, effectively reducing the inflation rate of Bitcoin over time.

What is the fixed supply of Bitcoin?

The fixed supply of Bitcoin is 21 million coins, which is hardcoded into the Bitcoin protocol and cannot be changed.

How does the proof of work mechanism in Bitcoin work?

Proof of work in Bitcoin involves miners competing to solve a cryptographic problem. Once solved, they add a block of transactions to the blockchain and receive a reward in Bitcoin.

Why does the difficulty of mining adjust every two weeks?

The difficulty adjusts to ensure that a new block is added to the Bitcoin blockchain approximately every 10 minutes, regardless of the total hashing power in the network.

When did the first Bitcoin halving event occur?

The first Bitcoin halving event occurred in November 2012, reducing the block reward from 50 to 25 Bitcoins.

What will happen when the last Bitcoin is mined in 2140?

After 2140, when the last Bitcoin is mined, miners will no longer receive block rewards. It is expected that transaction fees will incentivize miners to continue validating transactions and maintaining the blockchain.

How does Bitcoin's deflationary nature affect its value?

Bitcoin's deflationary nature, with a limited supply and potentially lost coins, suggests that as demand remains constant or increases, the value of Bitcoin could potentially rise.

What is a Bitcoin ETF and how might it influence the Bitcoin halving event?

A Bitcoin ETF (Exchange-Traded Fund) is a financial product that tracks the price of Bitcoin. It can influence the Bitcoin halving event by increasing accessibility and investment in Bitcoin, potentially affecting its price.

What is the significance of the sender fee in Bitcoin transactions?

The sender fee in Bitcoin transactions is a transaction fee that goes to the miner who adds the transaction to the block. It is expected to become the primary incentive for miners once the block rewards cease.

How has the Bitcoin halving event historically affected the price of Bitcoin?

Historically, the price of Bitcoin has reached an all-time high a few weeks after each halving event. However, the correlation is not guaranteed, and other factors can influence the price.

Outlines

00:00

🌐 Understanding Bitcoin Halving

This paragraph explains the concept of Bitcoin halving, which is a process where the reward given to miners for adding new blocks to the blockchain is reduced by half every 210,000 blocks, approximately every four years. It clarifies that Bitcoin halving does not cause a user's Bitcoins to disappear or break in half, but rather it's a mechanism to reduce the rate at which new Bitcoins enter circulation. The fixed supply of 21 million Bitcoins is highlighted, along with the importance of proof of work and the difficulty adjustment algorithm that maintains the 10-minute block addition interval. The paragraph also outlines the history of Bitcoin halving events and the progression of block rewards from 50 Bitcoins to the current 6.25 Bitcoins, with a projection towards the final Bitcoin being mined in 2140.

05:02

💼 Post-Halving Implications for Bitcoin Miners and Market

The second paragraph delves into the implications of Bitcoin halving for miners and the broader market. It discusses the necessity of miners for maintaining the blockchain and how, as the block reward decreases, miners will increasingly rely on transaction fees to maintain profitability. The paragraph suggests that as Bitcoin's value is expected to rise over time, transaction fees could become a significant incentive for miners. It also touches on the potential for large-scale adoption and the involvement of big players and corporations in the Bitcoin ecosystem. The paragraph addresses the common belief that Bitcoin halving events are followed by price increases, noting the historical pattern of all-time highs post-halving, while also cautioning that past performance is not indicative of future results. It concludes by inviting viewers to share their thoughts on the halving event and its potential impact on Bitcoin's price.

Keywords

💡Bitcoin

Bitcoin is a decentralized digital currency that operates on a peer-to-peer network known as blockchain technology. It is the first and most well-known cryptocurrency. In the video, Bitcoin is the central subject, with discussions revolving around its halving event, mining process, and its fixed supply of 21 million coins.

💡Halving Event

A halving event in the context of Bitcoin refers to the reduction by 50% of the mining reward that miners receive for adding new blocks to the blockchain. This event occurs approximately every four years or after 210,000 blocks have been mined. The script explains that this mechanism is built into Bitcoin to control the supply of new coins entering circulation.

💡Blockchain

Blockchain is the underlying technology that supports cryptocurrencies like Bitcoin. It is a distributed ledger that records transactions across multiple computers so that the record cannot be altered retroactively. The video script mentions blockchain as the foundation of Bitcoin, emphasizing its role in maintaining a secure and transparent transaction history.

💡Proof of Work

Proof of Work is a consensus mechanism used in Bitcoin mining, where miners compete to solve complex cryptographic problems to validate transactions and add new blocks to the blockchain. The script explains that this process is integral to the issuance of new Bitcoins and the security of the network.

💡Mining

Mining in the context of Bitcoin refers to the process of contributing computing power to process transactions and secure the network by adding new blocks to the blockchain. Miners are rewarded with newly minted Bitcoins and transaction fees for their efforts, as described in the script.

💡Fixed Supply

The fixed supply of Bitcoin refers to the predetermined limit of 21 million coins that will ever exist. This limit is hard-coded into the Bitcoin protocol and cannot be changed. The script highlights the fixed supply as a key factor influencing Bitcoin's potential value over time.

💡Difficulty Adjustment

Difficulty adjustment is a mechanism in the Bitcoin protocol that automatically adjusts the complexity of the cryptographic problems to be solved by miners. This is done to maintain a consistent rate of block addition to the blockchain, approximately every 10 minutes, as mentioned in the script.

💡Transaction Fees

Transaction fees in Bitcoin are the fees paid by users to miners for including their transactions in a block. The script suggests that as Bitcoin's value increases, these fees could become a significant incentive for miners to continue securing the network, especially after the last Bitcoin is mined in 2140.

💡Deflationary Asset

A deflationary asset is one whose value increases over time due to a decrease in supply or an increase in demand. The script mentions that Bitcoin is expected to become a deflationary asset due to its limited supply and the potential for lost or inaccessible coins.

💡Bitcoin ETFs

Bitcoin ETFs, or Exchange-Traded Funds, are investment funds that track the price of Bitcoin and are traded on stock exchanges. The script suggests that the introduction of Bitcoin ETFs could be one of the factors influencing Bitcoin's price, especially in the context of the halving event.

💡All-Time High

The term 'all-time high' refers to the highest price that an asset, such as Bitcoin, has ever reached. The script notes that historically, Bitcoin has reached new all-time highs following halving events, although the current situation with Bitcoin reaching its all-time high before the event is unprecedented.

Highlights

A Bitcoin halving event is a reduction by 50% of the reward miners receive for adding new blocks to the blockchain.

Bitcoin has a fixed supply of 21 million, which is hardcoded and cannot be changed.

Proof of work is the consensus mechanism where miners solve cryptographic problems to add blocks and receive Bitcoin rewards.

The halving event occurs every 210,000 blocks, approximately every four years.

Bitcoin's difficulty adjustment maintains a consistent 10-minute interval for block addition, regardless of hashing power.

The first halving event reduced the block reward from 50 to 25 Bitcoins.

By 2020, the reward for miners was 6.25 Bitcoins per block, and it will be further reduced with the next halving.

The final Bitcoin will be mined in 2140, after which no new Bitcoins will be created.

Miners will likely rely on transaction fees rather than block rewards to maintain the blockchain after 2140.

Bitcoin's limited supply and potential deflationary nature could increase its value over time.

Approximately 19.6 million Bitcoins have been mined, leaving around 1.3 million to be mined in the next century.

The Bitcoin halving event does not require any action from Bitcoin holders.

Historically, Bitcoin's price has reached an all-time high a few weeks after each halving event.

The price of Bitcoin before the halving event in 2020 reached an all-time high, differing from past patterns.

Bitcoin's price movements are influenced by various factors, including institutional investments and ETFs.

The Bitcoin halving event is a significant aspect of its economic model, affecting miner profitability and potentially its value.

The video encourages viewers to share their thoughts on the halving event and current Bitcoin prices.

Transcripts

what happens during a Bitcoin having

does your Bitcoin break into half or

does it magically disappear it's none of

it let's try and understand what Bitcoin

a halfing event is why it's important

and should you do something about it if

you're new to my channel consider

subscribing and hitting that like button

it would be of great help for me before

we dive in you need to understand a few

things about Bitcoin Bitcoin is a

blockchain it also has its own

cryptocurrency called the Bitcoin

Bitcoin has a fixed supply of 21 million

Bitcoins it is hardcoded into the code

and it can never be changed every year a

fair share of Bitcoin enters into the

circulation this happens because of

proof of work a consensus mechanism of

Bitcoin let me explain mining is a

process in Bitcoin where a bunch of

people work towards solving a

cryptographic problem and when they

solve it

they add a bunch of transactions as a

block into the blockchain of Bitcoin and

also get a reward for doing so this

reward is given in Bitcoin itself here's

the other thing every 210,000 blocks the

reward that's given to the miners for

solving these Pro these cryptographic

problems is cut into half that is if

they were receiving about 50 Bitcoins

the reward for solving a block would be

cut into half that is they would only be

awarded rewarded 25 Bitcoins every block

in a Bitcoin blockchain is added at an

interval of approximately 10 minutes the

210,000 blocks would be approximately 4

years if you think that powerful

computers might join the mining pool and

could solve it quickly that's not the

case Bitcoin has a difficulty adjustment

that happens every 2 weeks where the

algorith

is like oh you have so much hashing

power let me raise the difficulty so

that you take a lot of time to solve the

same problem this way the 10 minute time

interval is maintained and every block

is added only at the interval of

approximately 10 minutes that would take

approximately 4 years for 210,000 blocks

to be added into the Bitcoin blockchain

the Bitcoin blockchain was started in

January 2009 and until November 20 well

they were awarded 50 Bitcoins for every

block that they added this changed after

the first halfing even and from then on

until 2016 the miners were awarded 25

Bitcoins for every blog that they so so

you see where it's going the reward was

cut into half after the second having

event until 2020 all of the miners were

awarded 12.5 Bitcoins and from 2020

until April 2024 they being awarded 6.25

Bitcoins with the Bitcoin event

happening the reward is going to be even

cut further and for every block that the

miners add they'll be rewarded 3.125

Bitcoins that's still slashed into half

this goes on until the year

2140 when the last Bitcoin is going to

be mined every 4 years this reward is

going to be hared that my friends is

called Bitcoin Haring so why does it

happen in case of a fat currency when

the government thinks that there needs

to be specific economic goals to be

achieved then more money is printed when

they see that there is a lot of excess

money in circulation they just print

less or pull in that currency from

circulation this goes on year to year

although this method is arguably not

working accurately as a consumer it just

means that the value of the asset is

worth less and less than it was before

so you see what Bitcoin does here a very

basic principle is that when there is

less of something and the demand stays

the same then the value of that

particular asset increases experts even

say that Bitcoin is on track to become

even of deflationary asset this means

not only that the supply is limited to

21 million a lot of this Supply could

also end up in dead wallets the Bitcoins

could be sent to wallets that are no

longer accessible hence it's deemed as

unusable and there are only a few left

as of now there's approximately 19.6

million Bitcoins that's already mined

which means there's only approximately

1. 3 million Bitcoins left to be Min for

the next Century so what happens in 2140

when the last Bitcoin is mined and

there's no Bitcoin

left here's what here's where it gets

interesting unlike traditional assets

like gold when it's mined and comes into

circulation it can keep on trading but

in case of uh blockchain like Bitcoin

miners are essential part of the system

to keep the blockchain running they are

the ones who to verify and validate the

transactions and add it to the

blockchain the idea is that over time

bitcoin's value uh heavily increases if

you have ever transacted on blockchain

you would realize that there's always a

sender fee that's involved with every

transaction that you make this

transaction fee goes directly to the

minor so the minor who adds the

transaction to the block earns a block

reward and also earn the transaction

fees of that block from the sender the

idea is over time uh Bitcoin blockchain

would become very widespread and popular

that there'll be so many transactions

that these transaction fees will amount

highly for the miners and would be

enough to keep them running their mining

rate besides it's a fairly long time

even in the last couple of decades we

have seen a wide range of changes big

players have started coming in with

Bitcoin EFS so these big players and

corporations will likely have an

incentive to keep the Bitcoin blockchain

running do you have to do anything about

the Bitcoin having event not necessarily

as a Bitcoin holder you don't need to

take any specific action for it nor is

the amount that's with you going to

disappear it's just a lot to do with the

minor during this time miners typically

calculate if they can afford to keep

their mining rigs running if it is

profitable for them and those who

discontinue leave the blockchain and the

rest of the miners benefit from it

coming to the important question does

Bitcoin having event increase the price

of Bitcoin historically speaking after

every Bitcoin Haring event Bitcoin has

always reached its alltime high a few

weeks after the event however not much

changes were observed during or before

the event this time however it's been

quite different a month before the har

event Bitcoin reached its alltime high

and surpassed it too this could be

because of a various factors including

Bitcoin ETFs so many other factors which

we can't account for just because

something happened in the past does not

mean it will happen in the future too if

anything Bitcoin has always proved us to

expect the unexpected what do you think

of this Bitcoin event do you think

there'll be an increase decent price

what is the price of Bitcoin today when

you're watching this video comment down

below and I'd love to know that if you

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