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Bitcoin's algorithmic scarcity has already generated sky-high prices for cryptocurrency. But the biggest price spike could be reserved for the last bitcoin ever mined. And that's what's playing in the mind of technology mogul John McAfee.
"Thousands of miners spend, in some cases, millions of dollars each to find it (the last bitcoin) .The value may be less than the effort? The value should be hundreds of millions", wondered in a tweet. (See also: What happens to bitcoins after all 21 million have been extracted?)
Reddit Responses
A discussion on Reddit has some interesting answers to the reflections of McAfee. For example, a user has declared that the last bitcoin will never be extracted because the prize for bitcoin mining will therefore be close to zero. Others have questioned the usefulness of reflecting on this question at the moment, above all because the event is far in the future. According to most estimates, it is expected to occur in 2140. But this estimate assumes the provisioning of hash power, or systems to extract bitcoins, at a constant rate and an algorithmic difficulty that remains constant. Both of these factors are subject to change. (See also: Bitcoin Mining)
Bitcoin will reach 20.5 million marks by 2030. Considering there will always be only 21 million bitcoins, this means it will take about 110 years for the next 500,000 coins to be extracted . "Considering how many BTCs will be lost at that point and how much the economy should be distributed, 500,000 more coins will be a lot of coins for me," one user wrote.
Bitcoin's mining program is based on an algorithm that rewards miners with bitcoins after solving complex cryptographic puzzles, thus verifying the block's transaction history and adding it to the chain of blocks, all of which have a piece of the chain transaction history. The reward is halved every four years. For example, the initial reward consisted of 50 bitcoins. Subsequently there were 25 coins and, currently, are 12.5 coins. It is expected to fall to 6,25 coins by 2020.
Investing in cryptocurrencies and other initial coin offerings ("ICO") is highly risky and speculative, and this article is not a recommendation of Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since the situation of each individual is unique, a qualified professional should always be consulted before making any financial decision. Investopedia does not make any representations or warranties regarding the accuracy or timeliness of the information contained in this document. On the date this article was written, the author has small amounts of bitcoin and litecoin.
