One of the questions I would like to be clarified is how the Bitcoin 'coins' are capped off at 21 million?
Bitcoin was programmed so that when it began it's mining process, 50 bitcoins would be "rewarded"
to the miner for each block "found". After 210,000 blocks, or roughly 4 years, the programming
enforces that the miners can only take 25 bitcoins. If the miner took 50 again or anything more
than 25, that miner will create an invalid block and lose the potential reward. This process is called
the "halving" and will repeat every 210,000 blocks making the block reward split is half each time.
Eventually, sometime around the year 2140, the block reward will be 0 bitcoins due to the "halvings".
At this time, about 21 million coins will have been "mined" in total. Thus, the 21 million coin limit is a
result of this halving process in the system, and not directly programmed in as a coded cap number.
What stops a hacker from just randomly creating new coins?
If a hacker or a malicious miner created coins that didn't correspond to a proper coinbase transaction,
those coins would be invalidated by the verifying node network and the miner nodes. Essentially, they
could never be spent since they have a fake origin. Every valid bitcoin has a valid origin called the
"coinbase transaction", which is the first transaction in every new block. Every bitcoin transaction
cites its prior origin in order to prove that it is valid. That is one purpose for the "blockchain", to
prove prior validity in a decentralized manner.
And what is the difference between a block and a coin?
A "block" is a structure that the miners create that contains bitcoin transactions that they claim are
valid and is broadcasted to the rest of the network for verification of their work as well as for the next
block to be built upon. When your bitcoin transaction receives a "confirmation" or is "mined by a
miner", those both mean that a miner has placed your transaction into a block. Only when your
bitcoins have been placed into a block, are you somewhat sure that your transaction will not be
reversed. The more blocks built upon your block, the more secure your transaction becomes.
A "coin" is a term used to describe the monetary representative of the token "bitcoin".
Essentially, a "block" contains transactions of everyone's "coins".
Is a coin a shorter term for Bitcoin?
Yes, but it could also be used for any cryptocurrency's token.