Unfortunately there are a number of incorrect statements in this piece. Posting the corrections so that anyone who reads can have a correct view of how the capped bitcoin supply works since it's always important that newbies to the space learn correctly :)
- "As long as miners keep mining blocks then new coins should be generated in order to replace the ones already mined."
This is not accurate, after all bitcoins (or satoshis) have been mined then the coinbase transaction for each new block will be 0. So it's not that "new bitcoins will replace already created bitcoins' there just won't be any new ones created per block any more.
- "That said, this wouldn’t mean that Bitcoin would no longer be used; rather it would just soften how often transactions happen."
The block time is algorithmically adjusted every 2016 blocks so even after the block reward stops this shouldn't see a long term impact on the transaction per second.
- "The rate of transaction would not necessarily change because every transaction would only require one confirmation — without an upper limit on the number of blocks mined there’s really no way to tell when a block is confirmed for eternity."
Mathematically, blocks still require 6 confirmations (as outlined int he whitepaper) for transactions within to be seen as immutable. This isn't impacted by the block reward going to zero.
- "The supply of Bitcoin is capped at 21 million BTC. The total supply of Bitcoin will never increase because mining Bitcoins becomes more difficult as time progresses."
The total cap on the number of bitcoins in existence isn't because mining becomes more difficult, it's because the block reward is programatically set to halve every 210,000 blocks and a bitcoin can only be divided into 8 decimal places so after 33 halvings we run out of decimal places and no new bitcoins will be created each block.
- "After the last Bitcoin is mined, there will still be people who would like to use Bitcoins. The consensus is that mining difficulty will be adjusted to accommodate this need."
After all bitcoins are mined then there will be up to 21m bitcoins in circulation (although less due to private key loss, initial bugs etc), so the fact there are no new bitcoins being created doesn't mean bitcoin can't be used.
- "The finite rate at which blocks are mined also creates a predictable release of no more than 50 Bitcoins per 10 minutes."
The block reward halved every 210,000 blocks (roughly every 4 years) so whilst initial the reward was 50 per blocks, as of writing it's actually 6.25 and in May 2024 will drop by 50% to 3.125 and continue like this until May 2140 when no new bitcoins will be created within each block.
- "At first glance, it would seem as though the finite number of blocks to be mined could cause a devaluation in Bitcoin as more and more Bitcoins are mined."
Just because there are a finite number of bitcoin to be mined doesn't mean there is a finite number of blocks. Blocks can and will continue to be mined even when the block reward is 0. Miners will instead take their revenue from the transaction fees alone. Satoshi posted and discussed this economic model when they were still around.
