Post
Topic
Board Bitcoin Discussion
Re: Where do Bitcoins Came from?
by
DannyHamilton
on 12/02/2016, 16:43:13 UTC
Out of curiosity I just thought where do bitcoins came from??

Technically, bitcoins don't exist. Therefore, they don't "come from" anywhere.

The concept of "a bitcoin" is an abstraction that we humans use to make it easier to discuss the concept of transfer of control over value within the bitcoin protocol.  There is nothing in your wallet or in the blockchain that can be pointed to as uniquely identifying a specific bitcoin.  Instead, there is permanent record of outputs being created, and a set of protocol rules that say that any valid output can be used once and only once as an input into an entry that creates new outputs.

Those that are securing the permanent record are rewarded for their efforts by the protocol with a rule that allows them to create a specific total value of outputs in excess of the total inputs in the block that they create. This rule is enforced by every peer on the network to prevent any single individual or group from attempting to create a larger value of outputs than allowed.

The protocol rules decrease the size of this "subsidy" (cuts it in half) every 210,000 blocks until block number 6930000 where the "subsidy" is permanently reduced to 0.