Bitcoin crosses the milestone of 19.8 units mined on Christmas Eve

On December 24, 2024, the amount of bitcoins mined crossed the 19,800,000 mark, leaving less than 1.2 million bitcoins remaining until the total supply was exhausted.

After the halving in 2024, approximately 450 bitcoins will be mined daily. According to one of the oldest websites that collects various Bitcoin data, Clark MoodyDecember 24 witnessed a milestone of 19.8 million Bitcoins.

As many of you know, Bitcoin has a maximum supply of 21 million units. Does this mean that all Bitcoins will be mined soon, and what happens when the remaining supply runs out? Why is Bitcoin scarcity important, and can the supply cap be removed? These and other questions are answered below.

When will all 21 million bitcoins be mined, and what will happen next?

While approximately 20 out of 21 million bitcoins were mined during the first 14 years of bitcoin’s existence, the last remaining portions of bitcoin will only be exhausted in 2140. The reason is that bitcoin emission is set to decline by 50%. Approximately once every four years. Each time another 210,000 objects are extracted. The decrease in Bitcoin emissions is referred to as a “halving.”

As of December 2024, each block mined unlocks 3.25 Bitcoin as a mining reward. In 2140, this amount will fall to less than the smallest fraction of a bitcoin, known as a satoshi, which is one millionth of a bitcoin. Since Satoshi is scheduled to represent a small fraction of Bitcoin, the halving to 2140 will effectively stop the emission of Bitcoins.

Mining lies at the heart of the validity and safety of the Bitcoin network, while mining rewards are the main incentive for miners to continue their mining operations. Fortunately, when new bitcoins stop being emitted, miners will continue to receive rewards. Instead of receiving newly minted coins, they will receive portions of the transaction fees charged by senders. It should be noted that the fees paid by senders to prioritize transactions already make up a significant portion of miners’ rewards.

Why is bitcoin scarcity important?

While inflation Not inherently badBecause it drives the economy when it’s healthy, Bitcoin is usually celebrated as a deflationary asset. While the government can print more dollars, thus reducing the value of the dollars it already has, Bitcoin is encrypted in such a way that its supply is immutable and limited to 21 million units.

Since the total amount of bitcoins will only decrease over time as more and more units will remain “stuck” in locked wallets forever, it is believed that the value of each unit will continue to rise.

the Stock-to-flow model Proponents claim that scarcity drives value. However, it is understood that scarcity is not the only or primary driver of value. Can you withdraw one unit of your own currency and expect it to be the most valuable due to extreme scarcity? Maybe not. Given that Bitcoin already has a high value, its scarcity forces buyers to place larger bids per unit. This is how the halving causes the price of BTC to rise all the time.

Is it possible to remove the display ceiling?

A three-minute educational video about Bitcoin, released by BlackRock in December 2024, sparked online debate about the possibility and implications of removing supply caps.

Removal is not impossible, as the Bitcoin network structure has already been modified on various occasions through hard forks. So, if the community working on improvements to Bitcoin votes in favor of making Bitcoin inflationary and makes the necessary changes to the structure of Bitcoin – voila – one day we could see Bitcoin inflationary.

Opponents of the move claim that such changes would have turned Bitcoin into something completely different. What’s more, it reminds us that those who don’t want Bitcoin without a stable source can still use the classic version of Satoshi Nakamoto’s brainchild.

Why will the actual number of Bitcoins in circulation never get close to 21 million?

Many believe that Satoshi Nakamoto himself owns large amounts of Bitcoin mined in the early days, with some citing a sum of 1 million Bitcoin. However, the bitcoins in Nakamoto’s specific wallet have not moved since 2009, and millions of frozen bitcoins are all over the ledger.

According to the same Clark Moody website we mentioned at the beginning, there are 220.31 coins that are “definitely” unspendable. This means that it will never be possible to use more than 220 Bitcoins since they are isolated as unclaimed rewards, empty data outputs, or in other ways.

However, the word “provable” suggests that there are more “missing” coins. Various sources claim that between 3 to approximately 8 million bitcoins are lost forever. According to the CryptoSlate website June 2024 article7.7 million are either missing or “detained.”

Bitcoins are lost all the time for various reasons: people lose access to their private keys, their hardware, their paper wallets get fatally damaged, coins are sent to invalid addresses, etc. It is understood that the amount of bitcoins lost will continue to grow and the level of bitcoins in circulation will decrease.

What are Virgin Bitcoins, and why would someone want to pay more for them?

The year 2140 will mark the end of the era of so-called “virgin bitcoins.” This term refers to bitcoins that have never been used and, therefore, have a clean transaction history.

Virgin Bitcoins are already extremely rare. The only way to obtain this Bitcoin is to buy it directly from the miner via a P2P service (as depositing virgin Bitcoin in return would have tainted its transaction history). What’s more, if a portion of Bitcoin is received while mining in the pool, it cannot automatically be “virgin” as the mining pool distributes rewards among mining participants, i.e. miners do not receive these Bitcoins directly.

What’s more, once Bitcoin is included in Unspent Transaction Output (UTXO), it loses its virginity status. This happens by simply sending the virgin Bitcoin in parts.

Since genuine Bitcoins are rare and difficult to obtain, they are sold at higher prices than regular Bitcoins. Why would someone want to pay extra to get Bitcoin with a clean transaction history? The answer is not difficult to understand – institutional investors do not want to increase risks by purchasing bitcoins that were involved in criminal transactions. The bitcoins in the wallet are likely to cause damage to their wealth. The only way to cut this risk is to buy virgin bitcoins.

Prominent cryptocurrency writer Nick Carter, Questions Virgin Bitcoins exist, noting that they are almost impossible to produce. In his article, he denies the importance of a clean transaction history, pointing to the purchase of bitcoins seized by the US government from the Silk Road market by venture capitalist Tim Draper.