As we saw earlier, the issuance of new bitcoin is halved every 210000 blocks --- an event known as the halving --- which occurs approximately every four years. This will continue until the 32nd halving, at which point the issuance will drop to zero, since integer division is used and there are no fractions of satoshis. From that point on, no new bitcoin will be created.
Some argue that since miners’ incentive is the block reward, when there is no more reward --- which will come around the year 2140 when the last satoshi is mined --- there will be no more miners. Without miners, no new blocks will be added to the chain, and therefore bitcoin will die since transactions can no longer be processed.
The problem with this FUD is that it confuses reward with subsidy, and this confusion leads to incorrect conclusions. The miners’ incentive is indeed the block reward, but the block reward consists of two parts: the subsidy and the fees. It is the subsidy --- that is, the new bitcoin created in the block --- that is halved every four years, not the entire block reward. The block fees are the sum of all the transaction fees for the bitcoin transactions contained in the block; they are not dictated by the protocol but decided by users when making transactions. As adoption grows and bitcoin is used more widely, the limited block space pushes fees progressively higher.
After the sixth halving, which will occur in 2032, the subsidy will fall below one bitcoin. And in May 2023, blocks started appearing that collected several bitcoin in fees. So long before 2140, fees will consistently make up the larger portion of the block reward. If it does not happen this decade, it almost certainly will in the next, since the subsidy decreases exponentially. And nothing dramatic will happen --- the mining business will adjust to the average block reward, as it always has.
On the other hand, let us ask ourselves the following question: which reward was greater --- 50 bitcoin when the price of bitcoin was 1 dollar, 25 bitcoin when it was 200 dollars, 12,5 bitcoin when it was 1000 dollars, 6,25 when it was 20000 dollars, or 3,125 when it was 100000 dollars? The answer depends on what unit we use to measure the reward. If our unit of account is bitcoin, the subsidy decreases --- obviously. But if our unit of account is fiat money --- which is very common since electricity is paid for in fiat --- then over the first sixteen years of bitcoin’s life, during which the subsidy has been halved four times, the block reward, far from shrinking, has never stopped growing. The network’s total hashrate, which keeps growing, is a direct consequence of this. If bitcoin’s price in fiat terms doubles every four years, the reward in fiat terms will not fall --- it will keep rising --- and in a few years the subsidy will represent a small fraction of the total block reward, making the 2140 event a complete “non-event”. Nothing to worry about.
An interesting observation: this argument is the mirror image of the one about energy consumption. The FUD about energy waste claims that bitcoin mining consumes excessively and is unsustainable. Since the block reward is ultimately the factor that determines electricity consumption, the FUD of this chapter would imply that not enough will be spent (the reward is insufficient). Although the adjustment between energy expenditure and block reward does not happen immediately --- since a great deal of capital needs to be deployed (mining hardware and electricity generation capacity) --- if the reward for a block is 500000 dollars, miners will tend to spend on average up to 500000 dollars to mine it, with electricity being the largest cost component. Bearing in mind that energy expenditure tends toward the block reward, it is clear that both FUD arguments cannot be true simultaneously, since they represent opposite extremes. It cannot both consume too much energy and too little at the same time. In reality, neither argument is correct, since both are biased by acknowledging only parts of the full picture.
To conclude this very brief chapter, we cannot fail to mention that the term insufficient is a subjective judgment. What amount is sufficient? Sufficient for what? Bitcoin will continue to reward miners, and therefore to consume energy, in proportion to the utility perceived by the network’s users. If conducting final, uncensorable economic transactions in a matter of minutes, from anywhere in the world to anywhere in the world, provides great value to humanity, then fees will be high, and therefore miners’ rewards, energy consumption, and security will also be high. If bitcoin provides little value to humanity, few people will use it, and then fees, the reward, energy consumption, and security will all be small. And that is fine. There is no problem to solve, since bitcoin’s own mechanism adjusts expenditure to what is necessary --- if such a concept even applies. Bitcoin will always reward miners with exactly what it should reward them with, and will therefore consume exactly the amount of electricity it should consume: an amount always proportional to the utility perceived by its users. And since bitcoin genuinely provides utility, and as it spreads that utility will only grow, there will be sufficient reward no matter how small the subsidy, and therefore there will continue to be miners extending the blockchain beyond the year 2140, when there are no more satoshis left to mine.