Bitcoin, its miners and the blockchain

Bitcoins are generated by a mathematical formula, or algorithm

Bitcoin, its miners and the blockchain

Starting with 50 coins in January 2009 the formula has produced batches of new coins every 10 minutes

The bitcoin formula sets a limit of 21 million coins. This limit is expected to be reached around the year 2140

Bitcoin, its miners and the blockchain

These coins can be “mined” by anyone willing to dedicate computing power

Bitcoin, its miners and the blockchain

Miners use open source software to do two jobs

First, they confirm the validity of new bitcoin transactions that are waiting to be recorded on the public ledger

Bitcoin, its miners and the blockchain

Second, the miners must decode an encrypted, unique ID, generated by the bitcoin formula, to add the confirmed records to a public ledger known as the “blockchain”

Bitcoin, its miners and the blockchain

Miners are rewarded for their work with new bitcoins automatically generated by the bitcoin algorithm

The blockchain forms a permanent, publicly available, history of every bitcoin transaction