What happens when all Bitcoin are mined?

“According to the agreement, the first transaction in a block is a special transaction that creates a new coin that becomes the property of the block producer. This creates an incentive for nodes to support the network. This creates an opportunity to distribute and circulate coins for the first time as there is no central authority to do so.

The continuous addition of a constant amount of new coins is analogous to gold mining, where an effort is made to bring gold into circulation. In our case, the effort is the time and electricity consumed by the computing power.

Satoshi writes in the Bitcoin loophole White Paper:

The incentive can also be financed by Bitcoin loophole transaction fees, says onlinebetrug. If the output value of a transaction is less than its input value, the difference is a transaction fee added to the incentive value of the block containing the transaction. Once a pre-determined number of coins have entered circulation, the incentive can swing completely to transaction fees and be completely exempt from inflation”.

By this Nakamoto means that the miners will continue to receive a reward for securing the network even if the Coinbase transaction ceases. As time goes on and Coinbase decreases, transaction fees become more and more important.

The End Game

So Bitcoin’s “End Game” is that the Coinbase is completely eliminated. The reward for the miners then consists exclusively of the transaction costs. It is impossible to determine these transaction fees today. However, we can make some assumptions:

Since the space in a block is finite, broadcasters have to pay a fee for their transactions. The amount of this fee depends on how many other transactions are waiting for confirmation from the miners. If you are in a hurry with your transaction, you can pay a higher transaction fee. This gives the miner a greater incentive. This creates an auction market in which the broadcasters bet for the place in the block chain.

If too few transactions take place, mining may become unprofitable for the miners. In this case, they would probably switch off their hardware or use a different crypto currency. So there is a balance between the hash rate on the network, Bitcoin’s rate and the number of transactions on the network.