5 Answers - Where Does The Money From Bitcoin Mining Come From?
Where does the money from Bitcoin mining come from? When Satoshi Nakamoto announced about bitcoin/blokchain platform, it was also announced that a total of 21 million bitcoins will be issued. More specifically, 12.5 bitcoins per block (about every ten minutes) until mid 2020, and after that 6.25 bitcoins/block for 4 years until the next halving. And this halving will continue until 211040, by then 21 million bitcoins will have been issued. The money here is digital currency or bitcoin, which at its core, is a computer code. And this code has a limited supply. Bitcoin runs on blokchain technology. If you like to intellectually torture yourself with but how?, much like me, watch this Besides transaction fees where the money is taken from the transaction, Bitcoin miners are rewarded with newly printed money. In effect, every owner of bitcoins tacitly contribute to the mining effort by the fact that the bitcoins they own loose a tiny bit of value every ten minutes. Twelve point five bitcoins are newly minted for each block added to the blockchain. Given the volatility and appreciation of bitcoin, the other bitcoin holders hardly notice. Cryptographic Mining is a method of verifying transactions on a decentralized banking ledger, and miners are rewarded with new coins when they discover a New block in the chain. This reward is commonly called Proof of Work, or PoW for short. The more miners that participate around the world, the more competition there is to find the next block. Each block under normal circumstances should be found every 10 minutes, and Each block (at this time) contains up to 1MB worth of transactions, including the bitcoin reward allocated to the miner(s) that discovered the block. Each block along the chain, from beginning to end, will have a predetermine Continue reading >>
Where Does The Money From Bitcoin Mining Come From - Bitcoin
Where does the money from bitcoin mining come from So I know why people get money from bitcoin mining, but when those 25 bitcoins are distributed among the miners, where are the bitcoins coming from? Are they being generated from the creator of bitcoin, or is it an accumulation of transaction fees from the people making transactions with bitcoin? The Bitcoin software is programmed to generate blocks every ten minutes. The miner who finds the block is awarded 12.5 bitcoin, 'created' by the software. Every 4 years the block reward halves as well. Last year it went from 25->12.5 and in 4 more years it will go from 12.5->6.25 The miners also receive all transaction fees contained in the block they find. So It's basically a combination of transaction fees and created bitcoins from the network I guess then? With the creation process being the miner simply saying "Hey guys, I'm just going to give myself 12.5 BTC here". And the network replying: "Since you found a block, we're OK with that. Go ahead." And since the exchanges are part of that network and are also OK with that, you can sell your 12.5 BTC there for fiat. Compare that to the creation process of fiat money, which is Banks saying "Hey guys, we're just going to create some money and lend that out for interest and there's nothing you can do about it." And society replying: "Well... uh... I guess that's normal? Oh look the Kardashians are on!" What are the average transaction fees from a block? Miners get all the transaction fees, plus they give themselves a certain amount as a reward for finding a block. The current block reward is 12.50000000 BTC. The reward halves after every certain number of blocks. The reward is how new bitcoins are created, they don't "come from" anywhere. Miners can do that because a majority o Continue reading >>
Everything You Need To Know About Bitcoin Mining
Where do bitcoins come from? With paper money, a government decides when to print and distribute money. Bitcoin doesn't have a central government. With Bitcoin, miners use special software to solve math problems and are issued a certain number of bitcoins in exchange. This provides a smart way to issue the currency and also creates an incentive for more people to mine. Bitcoin miners help keep the Bitcoin network secure by approving transactions. Mining is an important and integral part of Bitcoin that ensures fairness while keeping the Bitcoin network stable, safe and secure. Bitcoin mining is the process of adding transaction records to Bitcoin's public ledger of past transactions or blockchain. This ledger of past transactions is called the block chain as it is a chain of blocks. The block chain serves to confirm transactions to the rest of the network as having taken place. Bitcoin nodes use the block chain to distinguish legitimate Bitcoin transactions from attempts to re-spend coins that have already been spent elsewhere. Visualize and Download High-Resolution Infographic Bitcoin mining is intentionally designed to be resource-intensive and difficult so that the number of blocks found each day by miners remains steady. Individual blocks must contain a proof of work to be considered valid. This proof of work is verified by other Bitcoin nodes each time they receive a block. Bitcoin uses the hashcash proof-of-work function. The primary purpose of mining is to allow Bitcoin nodes to reach a secure, tamper-resistant consensus. Mining is also the mechanism used to introduce Bitcoins into the system: Miners are paid any transaction fees as well as a "subsidy" of newly created coins. This both serves the purpose of disseminating new coins in a decentralized manner as we Continue reading >>
Cryptocurrency- Where Does The Money Come From? For Newbies Like Me - Part 2
Often if I talk to someone about cryptocurrency and steemit they ask this question. Where does the money come from? Even after a long explanation they still don't understand properly. If you are new to crypto, like me, it might be a good idea to read my previous post here. Before we can even attempt to answer the money question, we first have to understand about a block chain. A block chain is software used on a computer system where records can be stored, and facts can be verified by anyone. No one can edit records because all the information is available and accessible to everyone. Block chains store information across the network of personal computers which makes them decentralized. In other words there are too many people that use the system, which makes it difficult to corrupt. The people who run this system use their computers to hold bundles of records submitted by others - like you and me here on Steemit. These bundles of records are called blocks. The block chain then uses a mathematical formula that prevents any information stored on the block, to be counterfeited or even changed. So once something is on the block chain it is there forever. Instead of being controlled by one single administrator (like a bank) the block chain is decentralized. There is no exact definition for the word decentralized so to easily understand this, all you have to know is that a block chain is not controlled by one person or government. A block chain is controlled by the people that use it. Now that we understand what a block chain is we can explore further. The most well-know online currency is called Bitcoin. So where did the first bitcoin come from? The first bitcoin was actually mined, from block zero. That was the first block ever and is also called the Genesis block. The Gen Continue reading >>
Bitcoin Miners Are Making A Killing In Transaction Fees
Bitcoin miners are making a killing in transaction fees FILE PHOTO - A Bitcoin sign is seen in a window in Toronto Thomson Reuters Bitcoin miners are making money hand-over-fist. According to data from blockchain.info.com , the value of transaction fees paid to miners has reached an all-time high of $2.3 million. Miners are basically the hamsters in the wheel that keep bitcoin's network going. They use rigs of computers to unlock the blocks (underpinning bitcoin's network) on which transactions are made. Every time a miner unlocks a bitcoin block, vis-a-vis mining, all the transactions on that block are processed. The miner, in return for his hard work, is rewarded with 12.5 bitcoins for unlocking the block. They also get to keep the transaction fees bitcoin holders pay when they transact withthe cryptocurrency. In the early days, miners would only get a couple bucks in transaction fees.On Wednesday, however, miners received a whopping $2.3 million. "That's on top of the millions of dollars they receivedin their bitcoin rewards,"according to Aaron Lasher, the chief marketing officer at Breadwallet.He estimates miners, in total, were rewarded with 1,800 bitcoins, or $7 million. "That's going to about five to 10companies," Lasher said. But he says the exact number is hard to pinpoint. Since more people are using bitcoin, the demand to make a transaction has gone up. As such, the price to get to the front of the line has gone up. "I just made a transaction this morning," Lasher said."It cost me $25." That's on par with the average wire transfer fee. Still, it's a far cry from the pennies it cost to send bitcoin back in its earliest days. Transaction fees have been on a tear since August 5, a few days after Bitcoin split in two. Blockchaininfo.com Transaction fees have whi Continue reading >>
How Bitcoin Mining Works - Coindesk
In traditional fiat money systems, governments simply print more money when they need to. But in bitcoin, money isn’t printed at all – it is discovered. Computers around the world ‘mine’ for coins by competing with each other. People are sending bitcoins to each other over the bitcoin network all the time, but unless someone keeps a record of all these transactions, no-one would be able to keep track of who had paid what. The bitcoin network deals with this by collecting all of the transactions made during a set period into a list, called a block. It’s the miners’ job to confirm those transactions, and write them into a general ledger. This general ledger is a long list of blocks, known as the 'blockchain'. It can be used to explore any transaction made between any bitcoin addresses, at any point on the network. Whenever a new block of transactions is created, it is added to the blockchain, creating an increasingly lengthy list of all the transactions that ever took place on the bitcoin network. A constantly updated copy of the block is given to everyone who participates, so that they know what is going on. But a general ledger has to be trusted, and all of this is held digitally. How can we be sure that the blockchain stays intact, and is never tampered with? This is where the miners come in. When a block of transactions is created, miners put it through a process. They take the information in the block, and apply a mathematical formula to it, turning it into something else. That something else is a far shorter, seemingly random sequence of letters and numbers known as a hash. This hash is stored along with the block, at the end of the blockchain at that point in time. Hashes have some interesting properties. It’s easy to produce a hash from a collection Continue reading >>
Bitcoin Faq: Where Do Bitcoins Come From, And Can I Get Rich By Miningthem?
Bitcoin FAQ: Where do Bitcoins come from, and can I get rich by miningthem? Bitcoins are created in a process calledMining From an origional postcard in the LaTrobe collection of the State Library of Victoria, Canada. With mutilations byauthor Bitcoins are created in a process called mining, where a computer repeatedly works through a series of calculations that are designed to be difficult to solve, but to lead to a specific answer. In technical terms, the miners are looking for a number that, when hashed, produces a result with a specific number of consecutive zeros in it. Dont worry if you dont understand what hashing is: you dont have to know about that to mine. The miner that finds the right answer to these calculations is given a reward for their hard work: 25 Bitcoins. This process is called solving the block. Once the block has been solved, the process restarts, and the miners start looking for the next solution. This process runs repeatedly, with an average of one block being solved (and thus 25 Bitcoins being created) every 10 minutes or so. You can see the blocks being solved here . The short answer is No, unless you started some time ago. The long answer is more complicated. Solving an odd math puzzle might sound like money for nothing, but there is a real cost involved: the cost of the computers that do the solving, and the electricity they use. When you start running your computers at high speed 24/7, your electricity bill goes up. A puzzle that gets harder the more you try and solve it: from kH/S to MH/s to GH/s. That sounds pretty simple so far: computers are good at crunching numbers, and an average computer can run several thousand of these calculations (called hashes) a second. But there is a catch: to restrict the flow of new Bitcoins, the difficult Continue reading >>
Bitcoin 'miners' Dig More Than Just The Money
Bitcoin 'miners' dig more than just the money Bitcoin has crossed the $4,000 per-unit mark. Investors pin hopes on underlying "blockchain" technology. Cryptocurrency market is worth about $141 billion. Bitcoin market cap is within touching distance of major stocks like Netflix In the basement of Brian Samson's house in Middletown, Delaware, computer hardware hums softly beneath monitors with scrolling lists of seemingly random numbers and letters. As Samson goes about his day as a web designer and app developer, the setup earns him money in the form of digital currency. The best-known type, bitcoin, is how 36-year-old Samson began investing in the growing world of so-called cryptocurrencies four years ago. Intrigued by the technology used, which eliminates the need for traditional banks in transactions, he became both an investor and one of the "miners" who keep the system going. "It gives control to people instead of a government, and I like that," Samson said. "And its value is going up. I like that, too." Here's what sets ethereum apart from its rival bitcoin In simple terms, bitcoin which dates only to 2009 is part currency, part commodity. It can be used as payment for transactions at companies that accept it the same way U.S. dollars are, or it can be viewed as an investment similar to gold. As of Tuesday morning, one bitcoin was equal to about $4,066. So far this year, it's up more than a whopping 333 percent. The total value of all bitcoins in existence (roughly 16.5 million) stands at about $66 billion. Add in the other few hundred cryptocurrencies and it's a $141 billion market. A large monitor keeps cryptocurrency miner and investor Brian Samson updated on his earnings. Yet these new assets comprise just a fraction of the world's multi-trillion currency mark Continue reading >>
Where Do Bitcoins Come From?
Cryptocurrency Mining Where Do Bitcoins Come From? Do you like our content? Or, do you want to test out a new wallet? Feel free to send some coins to one of our wallets public addresses. All donated funds will go toward improving the site. What Will Futures Trading Do to Bitcoin and Altcoins? Market Turns Bearish As Futures Trading Approaches Suggestions on What to Do if You Bought Bitcoin at the Top Bitcoin TIP: Set Stops, Average, Buy the Dips, and Hold Bitcoin Hits $15k, $16k, and $17k! Beware the Bitcoin FOMO (Fear of Missing Out on Bitcoin) Bitcoin Breaks $13k (Subject to Change) Upcoming Bitcoin Forks 2017 2018 Bitcoin Correction Weighs Down the Altcoin Market With Bitcoin on a Run Past $9k, Here are Some Things to Watch For The content of this website is provided for informational purposes only and cant be used as investment advice, legal advice, tax advice, medical advice, advice on operating heavy machinery, etc. Our site is not officially associated with any brand or government entity. Any mention of a brand or other trademarked entity is for the purposes of education, entertainment, or parody. Neither CryptocurrencyFacts.com nor its parent companies accept responsibility for any loss, damage, or inconvenience caused as a result of reliance on information published on, or linked to, from CryptocurrencyFacts.com. In other words, this is a website on the internet offering free information about cryptocurrency, this is not your accountant, lawyer, or fiduciary offering you professional tax, legal, or investment advice. See our about page for more disclaimers and information. Bitcoins are created from bitcoin mining (adding transactions to a public ledger). An algorithm controls mining difficulty and total coin creation (21 million). Because coins are created and Continue reading >>
Where Does The Money Come From When Mining?
Where does the money come from when mining? I like the whole idea and even am mining a bit with my old pc. I get the whole system except one thing.. Where does the money come from when mining? I mean at the end you simply get money from a other person when mining right? Or is this simply money for free? (if we don't look at the electricity bills ofcourse) EDIT: Some other question just raise up into my mind. Can Bitcoin collapse if 95% of all people suddenly leave cause Google made a announcement of some kind? Quote from: Grouver on June 15, 2011, 08:31:24 PM Where does the money come from when mining? They are generated when a specific mathematical equation is solved by the mining software. Since it can't cheat (=must use brute force approach) and since the system is well designed (=mining difficulty) not "BTC mining flood" can occur. You! And they aren't useless since they generate bitcoins for you. I mean at the end you simply get money from a other person when mining right? Or is this simply money for free? (if we don't look at the electricity bills ofcourse) No, because it costs at least the electricity. Enthusiast BTC miner. Developer. twitter.com/BitcoinHeroes (Selling mining contracts. See my website (or PM me for details. I mean at the end you simply get money from a other person when mining right? So if iam understanding right this mining is only to generate new coins so they will that will get into your wallet (the bitcoin economy) at a X rate? If the above is true then the following statement als must be true. A static low amount of EURO/USD paid for the Electricity -> 1 BTC -> 15 EURO/ 18 USD (rounded and based on the current exchange rate) So at the end you are creating money since you started with a X low amount of USD/EUROS paid for the electricity wich Continue reading >>
Mommy, Where Do Bitcoins Come From? - The Process Of Mining Coins
Mommy, where do Bitcoins come from? Well, you see, when a shiny young Bitcoin catches the eyes of an ambitious miner, and because they love each other very much Wait, thats obviously too difficult to solve here. Besides, my whole goal is to keep things simple. Anyway, Bitcoins are made by solving complex math problems. This is done by a powerful machine that is built to solve these math problems. This process is called mining. People who own these machines to make money mining Bitcoins are called miners. When a batch of problems is solved it becomes known as a block. Blocks are verified by other users and once they are verified, they get added to what is called the blockchain. This chain continues to grow with a new block being added to it roughly every 10 minutes. This chain is really just a master ledger that will continue to grow and never end. The very powerful machines that mine zap a lot of power and drive up the miners monthly utility bill. The reason it takes so much power is the genius of the mathematics involved. It requires the mining machine to perform complex cryptographic algorithms. Once a math problem is solved by the machine, a block of coins is birthed. Every time 210,000 blocks have been created, the reward to the miner is halved. It takes 4 years to accomplish this. So its kind of like a Bitcoin Olympics. Currently the block reward is 12 Bitcoins(on June 23, 2020 the reward will only be 6 coins). Those coins goes to the miner whose machine was the lucky lottery winner at that time. There is a winner every 10 minutes. There are also a lot of miners competing out there too. Said miner now has something of value. Mine enough coins and you pay your electricity bill and then some. There is also another way to mine.Its called cloud mining.With this type o Continue reading >>
Bitcoin Mining - What Is It And Is It Profitable In 2018? A Beginner's Guide
Last updated on November 24th, 2017 at 08:12 am Before we start, if youre new to Bitcoin mining and dont know what it is watch this short and simple explanation: The short answer would be It depends on how much youre willing to spend. Each person asking himself this will get a slightly different answer since Bitcoin Mining profitability depends on many different factors. In order to find out Bitcoin mining profitability for different factors mining profitability calculators were invented. These calculators take into account the different parameters such as electricity cost, the cost of your hardware and other variables and give you an estimate of your projected profit. Before I give you a short example of how this is calculated lets make sure you are familiar with the different variables: Bitcoin Mining terms you should get to know Hash Rate A Hash is the mathematical problem the miners computer needs to solve. The Hash Rate is the rate at which these problems are being solved. The more miners that join the Bitcoin network, the higher the network Hash Rate is. The Hash Rate can also refer to your miners performance. Today Bitcoin miners (those super powerful computers talked about in the video) come with different Hash Rates. Miners performance is measured in MH/s (Mega hashper second), GH/s (Giga hash per second), TH/s (Terra hashper second) and even PH/s (Peta hashper second). Bitcoins per Block Each time a mathematical problem is solved, a constant amount of Bitcoins are created.The number ofBitcoinsgenerated per block starts at 50 and is halved every 210,000 blocks (about four years). The current number of Bitcoins awarded per block is 12.5. The last block halving occurred on July 2016 and the next one will be in 2020. Bitcoin Difficulty Since the Bitcoin network i Continue reading >>
Economics - Where Do Bitcoins Come From And What Gives Them Their Value? - Bitcoin Stack Exchange
Where do bitcoins come from and what gives them their value? Where do bitcoins come from? From the WeUseCoins.com video it appears they are just being produced by "miners" and sold to people. So who backs Bitcoin or gives it its value? if there are only 21,000,000 bitcoins where/who do the mined bitcoins copme from? user9947 Dec 2 '13 at 22:05 @Jonah There will only ever be around 21 million Bitcoins. Right now, there are fewer than that. The mined Bitcoins come from the mining process. Bitcoins are basically just numbers and the process of mining is the process of generating numbers. David Schwartz Jan 10 '14 at 22:35 Although individual bitcoins enter the Bitcoin economy as miners are rewarded for processing transactions, it's much more helpful to think of all 21 million bitcoins as having been created when Satoshi Nakamoto defined the Bitcoin protocol and launched the Bitcoin network in 2009. The reason for this is that the Bitcoin protocol specifically defines and controls when and how a limited total number of coins are rewarded to miners for the job of securing the Bitcoin network. These "bitcoins" are really just mathematical tokens which are very carefully controlled by the network protocol to prevent counterfeiting, theft, etc. By agreeing to use these mathematical tokens as money, the larger Bitcoin community is essentially "backing" their value and turning them into a currency in the same way traditional African and Asian societies used the money cowry despite the absence of any central bank. Unlike the money cowry: they can be divided into as small of pieces as you want and they can be transferred instantly across great distances via a digitalconnection such as the internet. Presumably, the members of the Bitcoin community who choose to accept them as money Continue reading >>
Bitcoin - Wikipedia
Unspent outputs of transactions denominated in any multiple of satoshis  :ch. 5 12.5 bitcoins per block (approximately every ten minutes) until mid 2020,  and then afterwards 6.25 bitcoins per block for 4 years until next halving. This halving continues until 2110–40, when 21 million bitcoins will have been issued. ^ The symbol was encoded in Unicode version 10.0 at position U+20BF ₿ BITCOIN SIGN in the Currency Symbols block in June 2017.  Bitcoin is a worldwide cryptocurrency and digital payment system  :3 called the first decentralized digital currency , as the system works without a central repository or single administrator.  :1  It was invented by an unknown person or group of people under the name Satoshi Nakamoto  and released as open-source software in 2009.  The system is peer-to-peer , and transactions take place between users directly, without an intermediary.  :4 These transactions are verified by network nodes and recorded in a public distributed ledger called a blockchain . Bitcoins are created as a reward for a process known as mining . They can be exchanged for other currencies,  products, and services. As of February 2015, over 100,000 merchants and vendors accepted bitcoin as payment.  Bitcoin can also be held as an investment. According to research produced by Cambridge University in 2017, there are 2.9 to 5.8 million unique users using a cryptocurrency wallet, most of them using bitcoin.  The word bitcoin first occurred and was defined in the white paper  that was published on 31 October 2008.  It is a compound of the words bit and coin .  The white paper frequently uses the shorter coin.  There is no uniform convention for bitcoin capitalization. Some sources use Bitcoin, capitalized, to Continue reading >>
Can You Really Make Money Mining Bitcoins?
Can You Really Make Money Mining Bitcoins? Profits are not easy to come by. Expensive hardware and risky cloud mining deals are the main challenges. If you want to join in the bitcoin frenzy without simply buying the digital currency at today's inflated prices, then bitcoin mining is another way to get involved. However, mining bitcoins does come with expenses -- and risks -- of its own. And the more popular bitcoins become, the harder it is to mine them profitably. Unlike paper currency, which is printed by governments and issued by banks, bitcoins do not come in any physical form. That creates a major risk, as hackers could theoretically create bitcoins from nothing. Bitcoin mining is how the bitcoin network keeps its transactions secure. Bitcoin transactions are secured by blockchains , which make up a public ledger of transactions. Because of how blockchain transactions are structured, they're extremely difficult to alter or compromise, even by the best hackers. But in order to secure these transactions, someone needs to dedicate computing power to verifying the activity and packaging the details in a block that goes into the bitcoin ledger. And that's precisely what bitcoin miners do. As a reward for doing the work to track and secure transactions, miners earn bitcoins for each block they successfully process. The bitcoin founders have set a limit of 21 million bitcoins available for mining. Once that total is reached, miners will still be able to benefit from transaction fees, but they won't be granted bitcoins as a reward for their work. As of mid-January 2018, approximately 16.8 million of those 21 million bitcoins have already been mined.Assuming the bitcoin mining industry doesn't change dramatically, it looks like we won't hit the 21 million-bitcoin limit un Continue reading >>