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History of Cryptocurrency

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Where do Cryptocurrency coins come from?

Bitcoin along with a vast majority of all Cryptocurrencies have a finite supply, and most likely not all units are yet in market circulation. The only way to create new Bitcoins or Cryptocurrency coins is through a process called mining. This is the special way for adding data to the blockchain!

How many Bitcoins are there?

The actual data protocol has Bitcoin’s max potential supply at twenty-one million coins. As of now, just fewer than 90% of these have been generated, but it will take a further one hundred years or more to produce the remaining ones! This is due to events known as chain halving’s, which reduce the mining reward available.

Can anyone mine for Cryptocurrency?

By mining, we add blocks to the blockchain. To mine we must be able to dedicate some serious computing power and solve cryptographic puzzles. Whoever creates a new block receives an incentive reward, normally in the shape of digital amount of Bitcoin or other Cryptocurrency tokens.

Of course it is intrinsically expensive to generate blocks, but also it is very cheap to check if it’s valid. If someone tries to cheat, the network immediately rejects the new block, and the miner will be unable to recoup the mining costs. No need for policing the system, everything is built in as it should be.

The reward – often labeled the block reward – is made up of two components: fees attached to the transactions and the block subsidy. The block subsidy is the only source of “fresh” bitcoins. With every block mined, it adds a set amount of coins to the total supply.