We have famously been told miners' rewards come from newly minted bitcoins when a new block is mined, and at the same time, bitcoins' supply is limited and no new bitcoins will be mined in the future when the last block is mined by 2140 per historical forecast. Now, what happens to miners when all the bitcoins are mined, will they never earn rewards after all bitcoins are mined, will bitcoin stop existing, NO! Will miners still validate transactions, YES! Let's find out how...
The circulating supply of bitcoin as of October 10th is 19,175,337.00 BTC out of the 21 million coins to be mined, source: coinmarketcap. This implies that 91% of all the bitcoins ever to exist have been mined, and the remaining 9% will all be mined by the year 2140 based on the transaction history from its creation.
New bitcoins are added to the bitcoin supply every 10 minutes which is the exact time to mine a new block. Bitcoin halves every four years reducing the miner rewards by 50%, which is the main characteristic of bitcoin to create scarcity. With this, miners' rewards are diminishing over time, and the faith of miners is unpredictable.
Bitcoin miners diminishing rewards as seen below. Bitcoin predicted next halving will occur by 2024 halving the reward of 6.25 Bitcoins for 2020 to 3.125 Bitcoins in 2024 considering historical halvings.
Source: decentralpublishing.com
Hopefully, miners will still earn rewards after all the bitcoins are mined. This will be through transaction fees which you are familiar with when transacting with third-party companies. Miners will receive rewards for approving transactions on the bitcoin blockchain.
Unfortunately, negative outcomes may occur during this period. With layer 2 networks like Lightning Network (LN) working on top of the bitcoin blockchain to facilitate near-uptime cheap transactions, the bitcoin main chain transactions could drop in favour of the Lightning Network. But most bitcoin maxis oppose the LN as a centralised entity which obscures the decentralised network of bitcoin envisioned by Satoshi Nakamoto.
Also, miners may become centralised and charge a higher fee for transactions to ensure profitability for their mining equipment. As well as ensuring the proper functioning of the bitcoin blockchain.
Bottom Line: To whatever becomes the future miners' rewards by 2140, will be highly impacted whether bitcoin serves largely as a store of value or for daily transactions. To understand, let's examine fiat and gold. The number of daily transaction fees for fiat is large as compared to gold in one given economy, because, fiat is largely used over gold. So by 2140, the adoption of bitcoin will prevail over miners' effects.
Also, read why are mined bitcoins hard to trace
DISCLAIMER: This article is meant to create awareness of the bitcoin mining reward and it should not be considered a piece of investment advice. As greedy as crypto is, I will never advise you to invest in crypto, always DYOR.
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