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How does one create Bitcoin?

You have probably heard that many people in Canada and around the world are working as “Bitcoin miners”. This certainly sounds like an interesting activity, but the fact is that this type of mining shares a symbolic connection with classic mining.

Bitcoin miners are individuals that are supporting the Bitcoin network. They also contribute to the transaction process that involves this cryptocurrency. If there are no miners around, Bitcoin will become a victim of cyber attacks and its value will drop right away. As a result of their processing and security activities, Bitcoin miners are getting new bitcoins or fractions of bitcoins to be more precise.

Whenever a miner solves a proof of work algorithm related to Bitcoin they can say that they have mined a so-called block. The block reward represents a specific amount of bitcoins that is agreed before the activity begins. This is how mining pools and miners are rewarded. Whenever a miner gets compensated for his efforts, the bitcoins they get are brand new bitcoins that have never been used before. That’s how generating new bitcoins works.

It’s interesting to know that the number of bitcoins is limited. In the beginning, the block reward was 50 bitcoins per block. However, every 210,000 blocks this reward becomes smaller for 50%, To put it simply, the 210,001 block has provided 25 instead of 50 blocks to the miner/mining pool that solved it. At this moment, given the number of miners and the complexity of tasks, every ten minutes a new Bitcoin block is found/solved. If this rate remains the same, it will take about four years to halve the current amount of bitcoins per block. Basically, a new bitcoin is created every ten minutes. In the end, the block reward will become so small that generating new bitcoins will become impossible.

Many people, who want to get involved in the latest Bitcoin phenomenon, are wondering whether these coins can be counterfeited. The fact is that only coins received by miners for their work can be used online. Bitcoin is based on cryptography that verifies every transaction. If the digital signature is incorrect, the user can’t spend the bitcoins. According to experts, it’s impossible to counterfeit bitcoins and creates fake bitcoins.

Keep in mind that you don’t have to generate bitcoins to use them. You can also buy Bitcoins online and exchange them on specialized exchange websites whenever you want.

2018-02-24T22:31:43+00:00