What happens when all the Bitcoins are mined? Well, it would be very difficult to predict the future of currency, especially one that is so volatile. In fact, the price of any one currency has been on a steady decline in recent months. The US Dollar, as an example, has lost a whopping 66% of its value since the start of the year.
In order for us to understand why this is occurring, we must first understand how the value of money changes over time. To get the best understanding of what happens when all Bitcoins are mined, it is best to examine this in a little detail.
First of all, there will be no more coins being produced from the mining process. If the value of the coins was not at all determined by the value of the hardware that mined them, there would be no need for this type of business. When all the hardware stops producing coins, this will result in a decrease in the number of coins being mined. This can occur for several reasons. One, because the hardware is no longer being used, it is no longer producing the same value.
Two, the hardware companies are all scrambling to make as much money as they possibly can. If the supply of coins decreases, this will result in an increase in demand and therefore, the value of the coins.
Three, there will be a shortage of hardware and consequently, the number of coins will decrease. What is left will have decreased in value. However, if everyone is mining, the value will increase substantially.
This is what happens when all the Bitcoins are mined. It is important to note, however, that it is highly unlikely that we will witness a complete cessation to the mining process in the next few years. As previously stated, the mining software and hardware continue to be developed, which will result in a higher return of investment.
One may ask, what will happen if the value of the coins rises above the value that was created? The answer is simple. All existing users will sell the coins to create a profit for themselves.
What if people did not want to sell their coins? This could cause a decrease in the value. This is referred to as deflation. The problem will only become worse in the event that there are many users with the same coins, which could result in a hyperinflation.
One could argue that the answer to this question would be, yes. However, in this case, a market would be formed. But that is not good enough, because only one coin was created. It would have to be traded for another coin in order to continue the process of trading and creating profit for its owner.