Technologies

Does Bitcoin Have a Long-Term Future?

[ad_1]

If you’re thinking of investing in Bitcoin, it’s worth considering what the end of the world’s most popular cryptocurrency looks like.

Although Bitcoins are a purely digital asset, there will only be a certain amount of them in circulation.

At the time of writing, about 18.8 million bitcoins are in circulation. However, this figure includes bitcoins that have been lost or are otherwise inaccessible.

The Bitcoin network uses a proof-of-work system. Under this system, the blockchain rewards those who do the work of maintaining it.

Bitcoin mining is not just an activity that brings new bitcoins into the system, it is fundamental to how the network processes payments.

Bitcoin miners compete to see who can solve a complex math problem and win the right to place the next block in the chain. If they succeed, they are rewarded with newly minted Bitcoin for their work.

Eventually, that will change. If all goes according to plan, the 21 million Bitcoin will be the last.

However, Byron Goldberg, Luno’s Australia manager, told InvestorDaily sister brand nestegg that it probably won’t happen in our lifetime.

He predicts that the final Bitcoin will probably not be mined until around 2140.

While that date is quite far off and doesn’t account for things like potential technological advances that could make mining easier or faster, Mr. Goldberg said many investors may wonder about the cryptocurrency’s long-term future after that date .

“Once the circulating supply reaches its cap of 21 million, Bitcoin miners will no longer receive block rewards (transaction processing rewards). Instead, they will only be rewarded with transaction fees,” he explained.

Assuming there won’t be any major changes to the Bitcoin protocol between now and then, this will also be the point at which Bitcoin will transition from an inflationary cryptocurrency to a deflationary one.

When that happens, Mr. Goldberg said, the dwindling supply of bitcoin will likely start to squeeze demand and push prices up even more.

“Once all bitcoins are mined, the asset will likely become somewhat deflationary over time, given the 21 million maximum supply and the fact that many people will either lose their bitcoins or inevitably die, thus 21 million becomes a theoretical maximum and supply actually decreases,” he said.


[ad_2]

LEAVE A RESPONSE

Your email address will not be published. Required fields are marked *