Bitcoin advocates always point out that there are a fixed number of bitcoins. There can never be any more of them, and therefore the bitcoin supply can never be watered down as it is with Federal Reserve paper.
So how can people be “mining” bitcoins by running some piece of software?
So how can people be “mining” bitcoins by running some piece of software?”
excellent question.
the mining is also the transaction confirmation process...by confirming the validity of transactions (ie, that Bob’s bitcoin was owned by Bob, and it was transferred once and for all to Sue), then the confirming computer gets a small reward - that’s the mining part. I also like the term minting.
the computer program which is used for this confirmation process also governs how much bitcoin is mined/minted/distributed as a reward....every few years, that number drops. And, once 22 million bitcoins are mined/minted/distributed/birthed....there will be no more. It’s all in the code.
The date for that is projected to be like 2140. Well beyond most of us here.
The code can’t be changed except by 51% being in agreement. So highly unlikely, and I’d assert, physically impossible (computing power, electricity, etc.).
hope that makes sense. good question, though.
It’s all done by people with large climate controlled rooms full of single purpose computers these days.