Creation and Circulation

Bitcoin mining is the process through which new Bitcoins enter circulation. Specialized computers, called miners, solve complex mathematical puzzles to validate transactions on the Bitcoin network. Miners who successfully solve these puzzles are rewarded with newly created Bitcoin. Every 10 minutes, a new block is added to the blockchain, and the reward goes to the miner who solved the puzzle.

Originally, the block reward was 50 BTC, but it halves approximately every four years in an event known as the halving. Currently, miners receive 6.25 BTC per block, and this reward will continue to decrease until the total supply of Bitcoin reaches 21 million coins.

Proof of Work (PoW) and Mining Difficulty

Bitcoin operates on a Proof of Work (PoW) system. Miners compete to solve puzzles that require significant computational power. The more miners join the network, the more difficult the puzzles become. Mining difficulty is automatically adjusted every two weeks to ensure a steady flow of new blocks, regardless of increases in computing power.

To grasp the scale: Bitcoin’s network now processes more computing power than all of the world's supercomputers combined, illustrating the immense security and robustness of the network.

Global Mining Efforts

As Bitcoin’s value has grown, mining has shifted from individual enthusiasts to industrial-scale operations, including energy companies and even governments. In countries like the United States and Kazakhstan, mining is treated as a strategic asset. Renewable energy and surplus electricity are increasingly used to mine Bitcoin efficiently. The global participation of corporations and governments highlights Bitcoin’s importance and its growing connection with the energy sector.

Halving Events

Approximately every four years, the reward miners receive for creating new Bitcoin is halved, a process known as a halving event. This mechanism limits the creation of new Bitcoin and ensures the cryptocurrency remains deflationary.

First halving: 2012 — reward reduced from 50 BTC to 25 BTC per block.

Current reward: 6.25 BTC per block.

Halving events maintain scarcity over time, increasing Bitcoin’s potential value as it becomes progressively harder to earn new coins.