In yet another feat of preprogrammed technical brilliance, at block height #714,032, the bitcoin circulating supply reached 18,900,000 - precisely 90% of bitcoin's predetermined 21,000,000 supply limit.
What about the remaining 10%?
Does this mean that 90% of mining profits are behind us? In short, no. However, the milestone does provide valuable insights into the state of bitcoin mining and its future - let's take a look.
Bitcoin miners use capital-intensive ASIC operations to mine bitcoin in an ever-increasingly competitive market. Despite the preprogrammed 50% decreases in the bitcoin denominated block reward (called the block halving), Miner revenue is continuously growing over time. In the years following the halvings in 2016 and 2020, the price of bitcoin and miner revenue significantly increased.
Bitcoin miners operate in a perfectly competitive market to competitively produce homogenous products (hashing). Thus, their primary goal for long-term financial success is to reduce operational costs as much as possible. Because bitcoin's annual appreciation is over 130%, innovative bitcoin miners who effectively manage their operational and marginal costs can remain quite profitable.
If the block reward decreases by 50% every four years, when will the total supply reach 21,000,000? Current estimates project that the Bitcoin circulating supply will reach 21,000,000 around the year 2140.
Under these estimates, bitcoin miners can confidently expect about 120 more years of mining where a block subsidy will exist. After this point, the only revenue miners will receive will be income from transaction fees paid during that block. Bitcoin miner revenue, and the price of bitcoin, are expected to continue to rise over time.
So, 90% of bitcoins were mined... does that mean that 90% of the opportunity is behind us? Not a chance! It means that the self-sustaining system works as intended and can respond to any threat. It proves that incomprehensible increases in the price of bitcoin did not alter the supply issuance, underscoring the network's unique, perfectly inelastic supply. The first twelve years of bitcoin mining also proved that participants in the free market for energy will always find a way to respond to bitcoin's short-term price and mining fluctuations. Bitcoin is successfully unalterable. Competitive miners will reap the benefits for the next one hundred years.