When you mine bitcoin, where does it come from?

When I ask the real concept, that's because I can't understand how those math processing can generate something, I mean, if you think in a way to generate "money". I know it may sound like stupid questions, but I'd like to clarify my ideas.

When you mine bitcoin, where those bitcoins come from? Who put it there?

Thank you!

mining-reward

rogcg

Posted 2013-12-19T10:42:20.857

Reputation: 137

Please only ask one question per post. See [ask] for more information. Also, your questions already have answers here: http://bitcoin.stackexchange.com/q/13374/5406 http://bitcoin.stackexchange.com/a/306/5406 http://bitcoin.stackexchange.com/q/91/5406 If you excuse the snarky remark, shouldn't you know that as a user with more than 4k rep on SE?

– Murch – 2013-12-20T10:50:10.480

2Your question really is "what is Bitcoin all about", and for that there's no better option than to punch "Bitcoin" into your favorite search engine. – David Schwartz – 2013-12-20T11:13:45.580

@rogcg: As mentioned above, this is a duplicate of How do Bitcoin clients know how many new bitcoins to mint when creating a block?. Also related are How exactly do new bitcoins come into existence?, How is the bitcoin 21 million cap implemented?, How many bitcoins will there eventually be? and many more.

– Murch – 2013-12-23T23:46:26.133

Answers

Short answer, but it really only scratches the surface:

The same process that is called "mining" also creates those Bitcoins. Meaning, you actually create them yourself but it can only done by solving a very difficult mathematical problem. The first one to solve that problem will get the reward. It is also important to mention that by solving of that mathematical problem the integrity of the Bitcon network is created (in terms of secure transactions).
There some exchanges, like Mtgox, BTC-e, Kraken, to name only a few where you can exchange Bitcoin for real money though the process of actually getting the money to your banc account can be very lenghty. There are also also a few Bitcoin ATMs, for instance in Canada of Finland and there are also sites where you can find people in your area who are willing to exchange your Bitcoins for real money.
This is hardcoded in the software used by the computers which creates the Bitcoin network. Roughly every 10 minutes, a new "transaction block" is created and as fixed reward is issued for this task. Currently this reward is 25 BTC but it will get lower continuously until around the year 2140 it will drop to practically zero. At that point 21 million Bitocins will have been created and that is the total sum of all Bitcoins that will ever be created (unless the software used by the Bitcoin nodes is changed in that aspect).

The most important point to realize about Bitcoin and what many people get wrong in the beginning is that there actually is not thing like a "Bitcoin". You do not have some kind of encrypted files in your wallet that represent a Bitcoin. The Bitcoin network essentially is a kind of distributed ledger system that keeps track of all transactions made within that system resulting on certain amounts of "Bitcoin" associated to a certain address (or account number). If you send somebody Bitcoin, you will actually transfer it from one address to another. Do be able to do that, you need to be in the posession of the private key for that address. This private key is what is stored in your wallet.

But you should really check out some of the great resources about that topic. For instance, check these out:

Primer: http://www.youtube.com/watch?v=Um63OQz3bjo

More In-Depth: http://www.youtube.com/watch?v=O0oDDIy0P2s

Mark

Posted 2013-12-19T10:42:20.857

Reputation: 269

I guess I'll give short answers, but you really should just read a wiki article or something.

The bitcoins are created for you as a reward. They didn't exist until that moment and nobody put them there. The coins are not tangible, they exist as just numbers.
People are interested in bitcoins because they offer some things that government-issued currency doesn't. They can be exchanged for money using online exchanges, or even in person. Essentially, somebody pays you their "real" money for your bitcoins. It's not much different than buying any digital good, for example music.
The software itself was designed to limit the number of coins to a certain number. The decision was made by the bitcoin creator(s). Nobody can change this number now, unless they re-design bitcoin into something new (which happens all the time with different altcoins).

Egor

Posted 2013-12-19T10:42:20.857

Reputation: 131