From a legel perspective, are Bitcoins “created” by a miner or the Bitcoin Protocol?

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Let me pose a related question. The Federal Reserve tells the US Mint how much money to print. Does the federal reserve create money, or does the US Mint create money? In a literal sense, the mints operate the machines that stamp the word "dollar" on a piece of paper. However, they don't choose how much to print. If one of the 3 mints were shut down, the Federal Reserve would just tell the other two to print slightly more.

Answering your question literally, I'd say the protocol created 21 million bitcoins when it was published.

But laws are evolving approximations. For example, for simplicity, the amount of sales tax and who it goes to is determined by state. Before the internet, the number of transactions that involved multiple states was so small it could simply be ignored. Eventually, lawmakers will be forced to clarify this, just as one day bitcoin won't be treated as a "precious metal" or "foreign currency."

On the flip side though, I don't think that...

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No one entity overseas the issuance of block rewards. This is one of several revolutionary concepts behind Bitcoin. (There is absolutely no Federal Reserve.) The Bitcoin Protocol and its distributed blockchain consensus mechanism is what effectively awards miners solving a very difficult hashing puzzle. The solution block groups a number of transactions together to be added to the Blockchain, and the preponderance of other "full node" block chains must add that solution block to their records in order for it to be "recognized".

The first transaction in such a block is called the "coinbase transaction." It is paid to the miner that successfully added a block to the Blockchain. It includes the current 25 BTC award and mining transaction fees.

Solo mining is accomplished by a solo miner connecting their miner (e.g., bfgminer, cgminer) to their own bitcoin node to advertise on the Bitcoin Network a solution has been found. Similarly for mining pools, they manage one or...

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Miners secure the Bitcoin network and process transactions. Without miners, Bitcoin would be vulnerable to attack and become worth nothing. In return for their security and processing services, miners are rewarded with new bitcoins (and transaction fees).

Blocks

Each time a miner successfully solves Bitcoin’s proof of work algorithm that miner mined a “block”. The miner or mining pool that mines a block is rewarded through the block reward, a set amount of bitcoins agreed upon by the network. The bitcoins included in the block reward are all new bitcoins. This is the only way that new bitcoins are created.

The block reward started at 50 bitcoins per block, and halves every 210,000 blocks. This means that each block up until block 210,000 will reward 50 bitcoins, but block 210,001 will reward just 25.

The Bitcoin difficulty makes sure that blocks are found on average every 10 minutes. With an average of 10 minutes per block, a block halving occurs ever...

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What is Bitcoin?

With the Bitcoin price so volatile everyone is curious. Bitcoin, the category creator of blockchain technology, is the World Wide Ledger yet extremely complicated and no one definition fully encapsulates it. By analogy it is like being able to send a gold coin via email. It is a consensus network that enables a new payment system and a completely digital money.

It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. Bitcoin was the first practical implementation and is currently the most prominent triple entry bookkeeping system in existence.

Sponsors for free Bitcoins

Many people new to Bitcoin are curious about how to get some. Bitcoin faucets, places where bitcoins are given away for free, have been a part of spreading Bitcoin since the earliest days. But one problem is running out of bitcoins to give! That is why we have figured out a sustainable way to...

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Takeaway: The Bitcoin protocol is still evolving, which makes understanding how it works even more complicated.

Bitcoin is gaining heavy momentum today as well as other

cryptocurrency

options like Litecoin. This article will go into a quick overview of Bitcoin as a generalization and then go deeper into how it actually works from a technical perspective.


What Is Bitcoin?

Bitcoin is a peer-to-peer payment technology that operates without a centralized bank or authority. The

peer-to-peer network

of users manages the transactions as well as the creation and distribution of bitcoins. Bitcoin is a digital currency, but also a user-run system. There is no exchanging of physical or digital dollars or notes, but with all transactions taking place in a block chain or ledger, and once complete, the transaction shows the new balance in your Bitcoin wallet. There are many benefits to a digital currency,...

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Bitcoin‘s inventor, Satoshi Nakamoto, described Bitcoin as “A Peer-to-Peer Electronic Cash System” in the original 2009 Bitcoin whitepaper – the document which created the roadmap for Bitcoin. To date, this is still the most simple and accurate description.

Bitcoin is a consensus network that enables a new payment system and a completely digital money. It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. From a user perspective, Bitcoin is perhaps best described as ‘cash for the Internet’, but Bitcoin can also be seen as the most prominent triple entry bookkeeping system in existence.

It is also known as digital cash, cryptocurrency, an international payment network, the internet of money – but whatever you call it, Bitcoin is a revolution that is changing the way everyone sees and uses money.

The beauty of Bitcoin is that it requires no central servers or third-party clearing houses to...

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What is Bitcoin?

Bitcoin is a consensus network that enables a new payment system and a completely digital money. It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. From a user perspective, Bitcoin is pretty much like cash for the Internet. Bitcoin can also be seen as the most prominent triple entry bookkeeping system in existence.

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Who created Bitcoin?

Bitcoin is the first implementation of a concept called "crypto-currency", which was first described in 1998 by Wei Dai on the cypherpunks mailing list, suggesting the idea of a new form of money that uses cryptography to control its creation and transactions, rather than a central authority. The first Bitcoin specification and proof of concept was published in 2009 in a cryptography mailing list by Satoshi Nakamoto. Satoshi left the project in late 2010 without revealing much about himself. The community has...

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Bitcoin is the currency of the Internet: a distributed, worldwide, decentralized digital money. Unlike traditional currencies such as dollars, bitcoins are issued and managed without any central authority whatsoever: there is no government, company, or bank in charge of Bitcoin. As such, it is more resistant to wild inflation and corrupt banks. With Bitcoin, you can be your own bank.

If you are new to Bitcoin, check out We Use Coins and Bitcoin.org. You can also explore the Bitcoin Wiki:

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Security guide for bitcoin

Community guidelines

Do not use URL shortening services: always submit the real link. Begging/asking for bitcoins is absolutely not allowed, no matter how badly you need the bitcoins. Only requests for donations to large, recognized charities are allowed, and only if there is good reason to believe that the person accepting bitcoins on...
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