what happens when the last Bitcoin is mined last one last one this is arguably the most important question in crypto and yet it's one that even DieHard Bitcoin Bulls like Michael sailor have had difficulty in answering as the adoption of Bitcoin continues this question will become exponentially more important because the existence of entire countries could depend on the answer if they start holding BTC as reserves that's why today we're going to give you the most in-depth analysis you'll find about this important question explain what the possible answers could be and what it all means for
btc's Price my name is guy and if you hold Bitcoin or indeed any other cryptocurrency this is a video you need to watch until the end all right let's take it from the top so we're all on the same page the Bitcoin blockchain is basically a distributed database consisting of blocks with each block containing BTC transactions and a reference to the previous block this begs the question of who creates these blocks of transactions and why they do it the answer is Bitcoin miners which are essentially specialized computers that expend computing power to earn the right
to create a block of transactions the reason why they do this is because each block contains BTC coins which have value now when Bitcoin launched in 2009 each block contained 50 BTC today each block only contains 3.125 BTC BC this is because every 4 years the number of BTC contained in each block is cut in half in a process that's known as the harving there have been four harving so far the first was in 2012 the second was in 2016 the third was in 2020 and the 4th 2024 these Bitcoin harving will continue roughly every
4 years until 2140 when btc's maximum supply of 21 million will be reached as a fun fact the reason why BTC maximum Supply is 21 million is believed to be because the value of the total Global money supply was $21 trillion when BTC launched in 2009 if this was indeed the real reason why then it implicitly assumes that one BTC will eventually be worth $1 million more on that later though now the reason why these harving exist is effectively to ensure that Bitcoin miners are incentivized to create blocks of transactions for as long as possible
by cutting the supply of newly issued BTC in half every 4 years it practically guarantees btc's price will double every four years assuming of course the demand for BTC stays the same and this is where things get interesting the demand for BTC has not stayed the same it has been steadily increasing while the supply of newly issued BTC has been steadily decreasing the result is that btc's price has grown by a lot more than 2x every every four years in fact it's grown by over 1 million x since 2009 so this begs the bigger question
of what gives BTC value well the short answer is that it's the only truly decentralized digital currency Bitcoin makes it possible to store and transfer value digitally with the highest level of ownership guarantees relative to other digital currencies including other cryptos in other words Bitcoin and the digital assets that exist on its blockchain such as the BTC coin cannot be controlled by anyone other than the person who holds these digital Assets in their wallet the fact of the matter is that nobody knows how much something like this is worth hence why btc's price is so
volatile that said it could be argued that a digital currency that can't be controlled is increasingly valuable given the fact that governments are increasingly looking to control the flow of traditional currencies which are mostly digital now this can be seen in things like Capital controls for Citizens and sanctions for countries be that as it may the most important thing in the context of mining is that the cost of creating a block of transactions is lower than the price of the BTC rewarded by each block it's also important to note that the block reward doesn't just
come from newly minted BTC it also comes from BTC transaction fees as another fun fact Bitcoin technically doesn't have transaction fees it has the option to tip miners to incentivize them to include your BTC transaction in the next block they're going to create because the use of Bitcoin has increased and the space in each block is limited it is necessary to add a tip every time now the answer you get when you ask bitcoiners what will happen when the last BTC is mined is that Bitcoin will continue chugging along because the transaction fees will be
enough to incentivize miners to keep adding new blocks with transactions because bitcoin's use will keep increasing this answer is somewhat questionable though given that these tips would need to be in the millions of dollars to sufficiently incentivize Bitcoin miners to continue supporting the blockchain in the future not only that but it fundamentally makes a series of faulty assumptions about the Dynamics of Bitcoin mining and BTC and by the way if you're enjoying the video so far be sure to smash that like button to let us know and subscribe to the channel and ping that notification
Bell so you don't miss the next one but back to when the last Bitcoin or rather the last BTC will be mined in case you missed it the last BTC will be mined sometime in 2140 this fact gives the impression that Bitcoin will be fine until then Believe It or Not Bitcoin could start facing issues as soon as the next decade fewer than 10 years from now that's because 99% of all BTC will have been mined by 2032 a fact that even Michael sailor has underscored in interviews at first glance this suggests that Bitcoin transaction
fees are going to need to rise quickly between now and then for Bitcoin to continue chugging along and many have claimed this upon closer inspection though you realize that it's a bit more complicated than that for starters the cost of mining BTC changes depending on how much Bitcoin mining there is going on if there's lots of Bitcoin mining then the cost of mining will increase and if there's less Bitcoin mining the cost of mining will decrease this is due to something called the difficulty adjustment which exists to ensure that a new block is created every
10 minutes regardless of the computing power committed to mining without the difficulty adjustment the block time would change based on the total mining power which wouldn't be good for btc's economics given this fact a surface analysis suggests that if the cost of mining BTC stays higher than btc's price for too long then there will be less Bitcoin mining in turn this will decrease the mining difficulty which will lower the cost of mining eventually making it profitable again but again it goes much deeper than this if the difficulty of mining Bitcoin Falls too much then it
theoretically becomes possible to do something called a 51% attack this is where a single entity or mining operation gains enough computing power to control transactions on bitcoin which would be very bad given that its value comes from the absence of control however this assumes that Bitcoin miners are the ones who determine which transactions of valid and this is where things get a little bit complicated so listen closely the Bitcoin blockchain is technically powered by two entities Bitcoin miners which process transactions and Bitcoin nodes which add and verify them now Once Upon a Time Bitcoin miners
were also nodes meaning that if you were mining Bitcoin you would need to run a node to do it today not all nodes are Bitcoin miners this is partially because Bitcoin mining is now done using specialized machines called Basics which can be linked together under one node to put it plainly it's also partially because lots of people run their own Bitcoin nodes either for fun or to support the Bitcoin Network in general and this is where things get interesting again because concerns that there would be a 51% attack on bitcoin if its difficulty fell too
low ultimately assume that most Bitcoin nodes would allow this to happen this seems extremely unlikely especially since Bitcoin nodes are easy to run this actually by Design if a malicious minor tried to spin up malicious nodes to process their faulty BTC transactions they would be out gunned by the rest of the Bitcoin Community put differently there would be an exponentially larger group of individuals and institutions who would be incentivized to spin up honest nodes to defend the blockchain something like this has actually happened once before and you can learn more about the Bitcoin wars in
the description but back to those Bitcoin mining costs the difficult difficulty adjustment isn't the only thing that determines how much it costs to mine BTC this is also determined by other factors unrelated to the Bitcoin blockchain namely the cost of the hardware required to mine BTC and the energy required to power this Hardware imagine a scenario where a Bitcoin miner has unlimited free energy because it uses some Next Generation nuclear power source believe it or not but this is already happening today not with nuclear power per se but with excess energy that's given away for
free or energy that's being secretly stolen lots of Bitcoin miners already have operational costs that are close to zero even if the revenue from mining BTC were to decline they would still be in the green and would therefore have no reason to stop mining so long as BTC continues to have value the caveat is that it's unclear how many miners fit into this category in some then Bitcoin is unlikely to collapse in 2032 when 99% of all BTC has been mined and unlikely to collapse in 2140 when all BTC has been mined because there are
Bitcoin miners who will continue adding blocks of transactions to the chain so long as BTC has a nonzero value but this also fundamentally assumes that Bitcoin Will Survive because of incentives related to mining which may not be the case hello hello it's me guys cousin Barry I'm very very sorry to be interrupting this no that fascinating video but I want to tell you about the coin Bureau deals page so listen up and listen well all right this is the place where you will find all the amazing promos and discounts what you as coin Bureau viewers
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come and have a word all right and this is where things get even more interesting as I mentioned earlier Bitcoins or rather btc's value comes from the fact that it's the only digital asset that you can truly own the only one that can't be controlled by a third party not surprisingly this is something that's very valuable to sanctioned countries the result is that we've seen many countries using cryptocurrencies like BTC for international trade albe it to a limited extent so far what is surprising though is the incentives these activities have created around the margins as
I mentioned a few moments ago Bitcoin is operated by a network of Miners and nodes logically it's in the interest of countries using BTC for trade or holding BTC as reserves that the Bitcoin blockchain stays as neutal neutral as possible the only way they can ensure this is by starting up their own mining operations and spinning up their own Bitcoin nodes lo and behold they seem to be doing exactly this take Russia for example it has reportedly legalized using crypto for international trade and could be mining its own BTC to that end Iran has reportedly
been doing the same for years and it's even possible that China has as well given that most Bitcoin mining reportedly continues to come from from China so then if countries like Russia Iran and China are using BTC for international trade do you think they care if they're mining BTC at a loss probably not in fact you could go as far as to say that they'd be incentivized to mine it regardless because an abundance of Commodities in these countries makes the profit margins much larger never mind the Dynamics around government-owned energy now when you first hear
about stuff like this you might think it's kind of unsavory that these kinds of countries are using crypto particularly when it comes to military financing as is the case with North Korea if you sit and think about it though you realize it is in fact Paving the way for Mass nation state BTC adoption consider that Bitcoin followed the same adoption process at the individual level when it first started everyone knows that btc's first real use case was to buy elicit stuff from the dark web as unpleasant as that was it nonetheless proved that BTC could
be used as a medium of exchange as was originally intended over the years more and more people started using Bitcoin and now we've got to a point where only a small fraction of BTC transactions are related to illicit activities specifically 0.34% as of 2023 news flash but we're in the early stages of the same thing happening with BTC transactions made by countries right now most BTC transactions between and within countries are probably related to sanctions evasion as time goes on however most BTC transactions between and within countries will be related to standard international trade this
will increase the incentives I mentioned a few moments ago specifically it will result in even more countries starting Bitcoin mining operations and spinning up Bitcoin nodes to ensure that the Bitcoin blockchain remains as neutral as possible again all the countries using BTC for trade or holding it as reserves will do this regardless of whether it's profitable come to think of it it's even possible that Bitcoin adoption at the individual and institutional level becomes so widespread that people demand that their governments mine Bitcoin to keep it functional this is admittedly a bit far-fetched but it underscores
how much the incentives around mining could change and that reminds me it's easy to forget that not all Bitcoin miners mine only BTC on the contrary it looks like most Bitcoin mining operations including publicly traded mining compan companies also mine other cryptos some of you might recall that Marathon digital was recently mining Casper's cashcoin for extra Revenue moreover some of these Bitcoin mining companies can support their operations by taking on debt if you think about it borrowing money is analogist to shorting the currency being borrowed and going long whatever you're buying lo and behold some
Bitcoin miners have been taking on debt to buy BTC when you remember that currencies are depreciating at a rapid rate you realize that Bitcoin miners could theoretically support themselves indefinitely by borrowing fiat currency to mine BTC so long as btc's value keeps Rising relative to The Borrowed currency Bitcoin miners can remain operational all else being equal when you pull up the chart of US Dollars measured in BTC terms you understand this fully now this brings me to the big question and that's what all this means for btc's Price well the answer isn't what you might
think in case it wasn't clear enough it seems that the risk to bitcoin isn't that the last BTC will be mined or that Bitcoin mining will become unprofitable the actual risk is that Bitcoin doesn't gain enough adoption from individuals Andor institutions for new kinds of incentives to enter the equation this explains why the Bitcoin Community has been hyperfocused on adoption at not just the level of the citizen but the level of the state getting countries to adopt Bitcoin will be good for btc's price but it's also arguably necessary for Bitcoin to survive in the long
term and it could be needed sooner than 2140 it's quite possible that Bitcoin needs to secure widespread nation state adoption by the end of this decade to ensure that there are enough incentives to keep supporting its blockchain past the next harving as you may know the next Bitcoin harving is in 2028 and it's going to be brutal for BTC miners that's just because the cost of mining BTC c will double all else being equal with the cost of mining one BTC being between 7 and $90,000 depending on your Source this means that btc's price would
need to stay above 140 to $180,000 for most miners to stay profitable countries may need to start buying BTC for this to happen but again this assumes that all else will be equal on the one hand the possibility that lots of miners go offline after the next Haring could reduce the cost of mining BTC due to the difficulty adjustment I'll remind you that there are also lots of Bitcoin mining operations that have very low operating costs on the other hand though it's possible that energy prices will start spiking by the end of the decade due
to power demands coming from Technologies like Ai and the growth of the middle class in countries like India besides the fact that this could keep Bitcoin mining costs High even if difficulty declines it could also result in government step stepping in to stop Bitcoin mining so that energy can be used elsewhere this has actually happened before even in countries which presumably have a geopolitical interest in continuing to mine BTC take Russia for instance it recently banned crypto mining in regions facing energy shortages mining bans and pauses have happened in the US EU and elsewhere in
recent years from our perspective the risk that energy prices will spike in the coming years and the risk that countries won't adopt bit coin fast enough are objectively bigger threats to bitcoin than when the last BTC will be mined or when miners will have to start relying mostly on transaction fees for Revenue these risks are also less theoretical and much more immediate which means they could have a bigger impact on btc's price as a result it wouldn't be far-fetched to say that a spike in Energy prices Andor a lack of Bitcoin adoption by nation states
could mean that BTC collapses to Zero by the end of the decade on the flip side however low energy prices combined with Rising nation state adoption could make BTC as big as gold by market cap in the coming years that's because bitcoin's narrative is digital gold and those advocating for nation states to adopt Bitcoin have advised them to hold as much BTC as they do gold I'm not sure if you've noticed but the reason why gold's price has rallied so much in recent years is precisely because governments around the world are flocking to decentralize current
CES that nobody can control and anyone can verify this is literally what BTC is and it's even better because it can be sent via the Internet to put things into perspective gold has a market cap of roughly $18 trillion and funnily enough Bitcoin hitting a market cap of $18 trillion would translate to a BTC price of around $1 million when you factor in the inflation in Fiat currencies we're likely to see in the coming years it's almost like it was inevitable okay if you found this video informative be sure to smash that like button to
let us know if you want to stay informed about cryptocurrency then subscribe to the channel and ping that notification Bell and if you want to inform others about what happens when the last BTC is mined then be sure to share this video with them what to watch next well why not check out our video on the possibility of the US creating a strategic Bitcoin Reserve you can watch that right here or check out our video on whether Bitcoin could indeed someday hit $1 million right here okay see you all again soon [Music]
