Post-Mine Definition
Post-mine refers to the period in the lifecycle of a cryptocurrency after all the coins have been mined and are in circulation. This event is significant because it represents a shift in the incentive model for maintaining the blockchain network. Instead of being rewarded with new coins, miners must rely on transaction fees as their main source of income.
Post-Mine Key Points
- Post-mine phase begins when all bitcoins or any other cryptocurrency have been mined and are in circulation.
- During the post-mine period, miners are not rewarded with new coins for their work of maintaining the blockchain.
- The primary income for miners during this phase comes from transaction fees.
- This event is critical as it represents a significant change in the incentive model for keeping the blockchain running.
What is Post-Mine?
Post-mine pertains to the stage of a cryptocurrency’s life cycle after all the coins have been excavated and are circulating in the ecosystem. This phase is a defining moment in any cryptocurrency’s life cycle, particularly those like Bitcoin with a limited supply of coins.
When does Post-Mine occur?
Post-mine happens when the total limit of a cryptocurrency is exhausted. Considering Bitcoin as an example, there are a total of 21 million Bitcoins that can be mined. Once these are all in circulation, the network enters this phase.
Where does Post-Mine apply?
It applies primarily to blockchain or cryptocurrency networks with a finite number of coins to be mined. Cryptocurrencies like Bitcoin are designed with a limit to the number of coins that will ever exist. This guarantees its entry into the post-mine at some point.
Why is Post-Mine significant?
The post-mine phase is significant because it leads to a considerable change in the financial incentives for network participants tasked with maintaining the blockchain’s integrity. It’s a transformative period for miners as they shift from receiving block rewards to relying more on transaction fees as incentive.
How does Post-Mine function?
During this phase, miners keep securing the blockchain network but instead of mining new coins, they validate transactions and add them to the blockchain. Consequently, they are rewarded through the transaction fees associated with each transaction they validate, as opposed to earning new coins.
