![]() It gets harder for bitcoin miners to earn bitcoin rewards as the supply increases. The limit won’t be hit until roughly a century from now. Once miners produce that many, unless there’s a consensus change to Bitcoin Core software, no more can be created. The Bitcoin protocol states that there will never be more than 21 million bitcoin. There is a publicly known amount of bitcoin in the world, which slowly grows as it is created to pay the miners who earn it by running the system. This is the capstone of the Bitcoin network’s solution to the problem of government-issued currency. The owner is identified only by a VERY long string of letters, a public key. Each transaction is vetted to assure that the rules are followed. In that case, brand-new bitcoin is created – according to an established formula – and deposited in the miner’s own account in the ledger.įinally,the bitcoin miners see each and every transaction. The number of bitcoin is fixed – until a miner earns some as a result of the mining work. These rules enforce the fact that, at any given moment, there is a known supply of bitcoin, with the ledger tracking who owns how much. Since all the miners run the same software, everyone follows the same rules. The rules built into the Bitcoin Core software used by all the miners are the key to everything. For ease of computing, the transactions are grouped into blocks, and it’s actually the blocks that are locked up tight and chained together with hard-to-break software locks. Second, the computing puts a lock on the new transaction, a special fancy lock that links to all the earlier locks on all the prior transactions.Stuff like that, things you don’t even think about when your money is physical and sits in a wallet - but when it’s digital, it has to be enforced with software. Things like you can only spend money you have. Simple rules that are essential to virtual currency working. First, the computing assures each new transaction that someone tries to put in the ledger follows the rules.What the miners actually do is solve computationally intensive problems – all using standard software on juiced-up hardware – with two important functions: In short, while there are trade associations and groups for professional crypto mining operations, miners are independent groups who put up their own money and time to make bitcoin. Open source money is only as valuable as the trust users have in network participants. That’s how the incentives in the bitcoin mining ecosystem make transparency and integrity mutually beneficial. If the other miners cheated it did it would hurt you, too. So, as a miner, you continue being a trustworthy transaction verifier– and, by the way, watching the other miners closely to make sure none of THEM cheat. Then the miner’s investment, both the machines and the digital assets accumulated, would be worthless. ![]() ![]() If people started thinking that miners were self-dealing corruptocrats, the value of bitcoin would immediately plummet.
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