Bitcoin miners are spread all over the world, especially in China. In countries like Iran, the mining industry is supported and regulated by the government as well. However, in many other countries, governments have not recognized the bitcoin industry at all. Instead, strict rules and regulations against mining like a ban have been imposed. Although the survival of the bitcoin mining industry is dependent on the governmental policies, the price and future of bitcoin also get to decide the fate of the mining industry.
At the moment, miners spread all over the world have deployed massive computing power to the bitcoin network to verify transactions made on the bitcoin blockchain. Apart from expensive hardware used for mining, miners bear the cost of electricity as well to validate transactions made on the bitcoin network.
As miners undergo financial expenditure to mine bitcoin, they are awarded bitcoin as compensation. Bitcoin is programmed to add a new block every 10 minutes. Whenever miner successfully adds a block to the bitcoin blockchain, bitcoins are awarded to him. At the moment, upon completion of a block, miners are awarded 12.5 bitcoins whereas next year after bitcoin halving takes place, the award will be reduced by a half i.e 6.25 bitcoins.
As the supply of bitcoin is finite, after 21 million bitcoins are created, no new bitcoin will be ever created. Under these circumstances, one might think the future of bitcoin mining which relies heavily on new bitcoin coins. While no new bitcoins will be created and the existing ones will continue to circulate, all the transactions made through bitcoin will be against small transaction fees which will be forwarded to miners.
According to one estimate, bitcoin creation will continue for another 120 years but the rate of creation will decrease with time. This means that the supply of bitcoin will decrease with time as well. As bitcoin strictly follows the fundamentals of supply and demand, low supply will push the price of bitcoin to rise. So there’s a possibility that transaction fees after 120 years have much more value than the award of bitcoins received by miners today. This explains that the mining industry will continue as long as bitcoin lives and serve miners even after all bitcoins are minted.
READ ALSO: Bitcoin Alone Created Several Millionaires