Bitcoin miners will continue to be front-and-center in the cryptocurrency industry but the way they are compensated is evolving, Luxor Mining founder and CEO Nick Hansen said.
Hansen said, in a Cointelegraph story about "The Last Bitcoin," that miners are soldiering on despite losing block reward but that they will continue to verify and record transaction on the block chain. Hansen added that transaction fees ultimately will be the miners' primary incentive to continue in their work, even after the last Bitcoin is mined.
"That's why as transaction fees become an increasingly important part of Bitcoin mining economics, understanding transaction fee dynamics and forecasting them into the future becomes even more critical," Hansen said.
The Cointelegraph news story tracked the industry from Satoshi Nakamoto's mining the first 50 bitcoin, "the genesis block," on Jan. 3, 2009, currently valued at $29,835. Nakamoto's seam marked the beginning of a billion-dollar industry centered around crypto mining. Now, after more than 13 years and with a limited supply of 21 million Bitcoins, the miners' future after all the coins are issued is uncertain.
Some experts believe transaction fees will become the primary incentive for miners to continue verifying transactions on the blockchain, but the shift is likely years away. Hansen told Cointelegraph that, based on the block discovery rate and halving process - roughly every four years or every 210,000 blocks of transactions - the last Bitcoin probably will be mined sometime around 2140.
Some experts also speculate about the potential impact of quantum computers and the possibility of extending the Bitcoin hard cap beyond 21 million, if needed.
The current reward for successfully validating a new block on the blockchain is 6.25 Bitcoin which, according to CoinGecko, is now worth roughly $188,381. Transaction fees are also given to miners. Calculations revealed in a tweet on May 1 by on-chain analytics company Glassnode show that since 2010, fees and block rewards have brought in over $50 billion for miners.
Hansen is of the opinion that long after the last Bitcoin has been mined, transaction fees will eventually override all other incentives for miners to keep working. Given that no one who is now mining will be alive when the final Bitcoin block reward is paid, this change is most likely still years away.
The second Bitcoin halving is anticipated to take place around April 2024 and is a deliberate reduction in the incentives that miners earn. The reward for each block will then be 3.125 Bitcoin, or currently about $94,190.
