Seventeen years after Bitcoin’s first block was created, 95.24 percent of the total coin supply has circulated on the network. Accordingly, currently less than one million units of the total supply of 21 million are yet to be mined. The remaining supply is planned to be removed gradually until 2140.
Turning Point in the Halving Mechanism
The Bitcoin network systematically reduces the production of new coins with block reward halvings that occur every four years as scheduled. While the reward amount per block exceeded 15,000 BTC in the first years of the system, this figure was halved each time with the four halvings that took place afterwards. With the last halving in 2024, the reward per block decreased to 3,125 BTC, and this amount is expected to halve again in 2028.
The systematic reduction in block rewards spreads the production of new coins over a certain timeline, as per the protocol design. While the first 20 million coins will be mined in approximately 17 years, the mining of the last one million will spread over the next 114 years. Thus, the “scarcity” element in the network is mathematically spread over the long term.
Changing Dynamics in Mining Revenues
The decreasing rewards are also transforming the economic nature of Bitcoin mining. While block rewards were the main source of income for miners in the early years, the importance of transaction fees will increase as rewards decrease over time. In the long run, block rewards are expected to decline to negligible levels, while miners’ income is expected to rely almost entirely on transaction fees.
A prominent question here is whether transaction fees will be sufficient to maintain network security. With each new block, this uncertainty continues to remain on the agenda as one of the main discussion topics of the system.
Supply limitation, which is the basis of Bitcoin’s development process and deflationary model, stands out as one of the most striking aspects of the cryptocurrency’s position in the markets. The fact that most of the total supply has been mined brings the scarcity argument back to the agenda in the cryptocurrency world.
Bitcoin Magazine emphasized that 95.24 percent of the total Bitcoin supply is currently in circulation, highlighting that this situation is “an indicator of the functioning of digital scarcity.”
The process of issuing the last million supply tranches will continue for a period approximately six times longer than the first 20 million coins. This shows the sustainability of Bitcoin’s long-term structure and that it will be supplied regularly.
In light of all these developments, mathematically limited supply in the Bitcoin network, the evolution of the mining revenue model and the future of network security continue to be among the main topics of discussion. While the processes are working as predicted due to the Bitcoin protocol design, the experience and discussions in the market continue.
