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Board Beginners & Help
Re: Where does the money come from when mining?
by
realnowhereman
on 16/06/2011, 10:02:16 UTC
The 50BTC comes from the miner being permitted by the network to add a transaction of 50BTC with an address of a public key that the miner controls to the newly generated block.  You are correct that this devalues btc a little tiny bit, but the system has inbuilt deflation by reducing the amount of BTC you get for solving a block (currently 50, will reduce to 25 next year) so, over time, the whole currency will deflate rather than inflate.

Erm... no.

Decreasing inflation is not the same as deflation.

Bitcoin is inflationary, and will be until it stops being so.  It's not a problem though because it is predicted.

Excluding lost coins, Bitcoin will never be deflationary.

(I'm using the strict definitions of inflation and deflation: money supply).