I just reviewed the Bitcoin figures, and there’s something worth noting. We’re already above 20 million BTC in circulation, so that milestone has practically already passed. What’s interesting is what comes next.

For those who don’t know, the Bitcoin protocol is designed so that the last million coins take decades to come into view. The estimates say it will take about 114 more years to complete that final portion. This has a lot to do with how the process of mining cryptocurrencies in Bitcoin works.

Every time a new block is generated, the reward is cut roughly in half every four years. We’ve already passed several of these (halving), and each one slows down the pace even more. So, if we’re thinking about mining cryptocurrencies in the future, miners will be competing more for transaction fees than for new coins.

What I find curious is that this perfectly reflects the programmed scarcity that Satoshi thought of from the very beginning. Bitcoin will never be inflationary like fiat currencies. There will be exactly 21 million, period. And we’re already almost at all of them.

This is one of those things that distinguishes Bitcoin from the rest. It’s not that mining cryptocurrencies becomes impossible, but that it changes radically. The economic incentives are going to be transformed completely in the coming years. Anyone watching this space in the long term should keep this in mind.