Endgame of Bitcoin: How will the network survive after 21 million Bitcoin mined?

In 2140, the world’s last 21 million Bitcoins were mined. At that point, the majority of the miner’s income will disappear. Instead, network security is entirely dependent on transaction fees.

According to experts at Okx Singapore, Jucoin and Xbo, the timeline gives the community plenty of time to prepare for this moment. Bitcoin creates sufficient institutional demand and retail-driven activities to justify premium transaction fees for security. However, concerns about centralization and appropriate adaptability remain.

2140 Challenge: Bitcoin after sub-sidy

For over a century, block subsidies have secured the Bitcoin network. This reward serves as a miner’s payment to verify transactions made to create new Bitcoin. The grant was a major incentive for miners to ensure network security and decentralization.

However, in 2140, the last bitcoin was mined and the subsidies were completely eliminated.

“When the block subsidies are finally gone, Bitcoin’s security will be entirely dependent on transaction fees. It’s how the demand for block space evolves after that.”

If Bitcoin demand continues to grow at its current pace, experts believe it will naturally fill the gap left by the disappearance of block subsidies.

Possibility of bullishness: the case of optimism

The growth of Bitcoin utility driven by increasing demand and high value transactions organically creates robust rates that can remain secure over time. This essentially increases the price of transaction fees, when combined with the development of the Bitcoin network over time.

“By 2140, Bitcoin’s role as a digital infrastructure is so embedded in global finance that high value settlements naturally generate significant fees, something like very little real estate.

The key driver behind this belief is the increased participation of large institutions. When these entities integrate Bitcoin into their business, they generate consistent demand for transactions on the chain and a reliable revenue stream for miners.

Large transactions from these players are key to a healthy rate market. Their involvement justifies the fee market and ensures its stability.

“Institutional Treasury moves, cross-border settlements and large layer two batches of final payments drive consistent demand. Central bank digital currency and corporate Bitcoin adoption creates regular and valuable transaction flows that justify premium fees,” added Li.

The infrastructure that supports the network will also naturally improve. Future development of layer 2 solutions will be a key factor in ensuring Bitcoin’s long-term sustainability.

How Layer 2 strengthens your network

Protocols like the Lightning Network are designed to address the scalability limitations of Bitcoin by handling small, frequent transactions from the main blockchain. These Layer 2 reduce the congestion and fees in the main network by handling this activity off-chain.

“Layer 2 is important. It helps to expand your daily use while keeping your Bitcoin main chain organized and valued. When providing a user-friendly gateway, you can enable Bitcoin for micro and macro transactions.

These solutions may even increase traffic to the Bitcoin network, rather than decreasing the value of the original layer.

“Layer 2 actually brings more valuable activities back to the Bitcoin main chain. This is not often. Lightning channels need to open and close on-chain, and new solutions are creating a whole new type of high-value transaction,” explained Li.

This optimism is defensible, but the transition is not without significant risks. Its success depends on the network’s ability to generate the appropriate amount of transaction fees.

Will a fee-driven model undermine security?

While many believe that Bitcoin’s persistent utility will solve the challenges after subsidy security, others warn that the transition could come at the expense of long-term security.

If transaction fees fail to grow consistently, the miners’ financial incentives could decrease and the network hashrates could decrease. Such events can drain the resilience of your network.

“Bitcoin’s security budget will erode over time, weakening the incentives to secure a network, which could lead to scenarios where a significant portion of mining power will go offline, as seen during past hashrate shocks caused by narrowed profits or regulatory changes.

Transaction fee volatility will also threaten Bitcoin’s decentralization.

Can Bitcoin maintain decentralized promises?

If the rate market becomes unpredictable, this can lead to a concentration of hash power and undermine the doctrine of core Bitcoin.

“If trading fees are not sufficient to maintain smaller, independent miners, Bitcoin’s network could be more centralized.

The failure of the fee-driven model could have existential consequences for Bitcoin’s role in the global economy. If a network feature is a hit, its reputation as a trusted and valuable store is the same.

“There is a risk that Bitcoin could be considered more of a museum work than a living ecosystem,” Aizik added.

Luckily, the Bitcoin community has 115 years to plan ahead.

Plan ahead

Despite the potential risks, the overall sentiment from industry leaders is one of confidence.

The consensus is that, coupled with a dedicated community and a growing ecosystem, Bitcoin’s unique design allows for a successful transition to a purely fee-driven model.

“If the interests are high enough, the market is very efficient in pricing security. If Bitcoin is worth it in 2140, economics will align to protect its value. The transition timeline allows for staged adaptation rather than sudden shock,” Li concluded.

Izic agreed, noting that the fact that this conversation had happened before proved its resilience.

“The industry needs entities dedicated to being part of this evolution to help them be installed in the next generation of users while respecting the fundamental principles of Bitcoin,” he said.

By continuing to cultivate this moving nature, the future of Bitcoin should remain in good hands.

Post-Bitcoin Endgame: How will the network survive after 21 million bitcoins are mined?