Who Creates New Bitcoin?

• Blockchain Council
• May 08, 2025

New Bitcoin is created through a process called mining, where miners use powerful computers to solve complex puzzles and validate transactions. These miners are rewarded with newly minted bitcoins, which is how Bitcoin enters circulation. This decentralized process allows Bitcoin to maintain its value and security, without relying on any central authority or government.

In this article, we will explore how Bitcoin is created, who is responsible for its creation, and how it’s distributed across the network.

Bitcoin Created Through Mining

Key Phases of Bitcoin Mining

Event	Year	Block Reward	Remarks
Bitcoin Introduction	2009	50 BTC	Initial block reward for miners
First Halving	2012	25 BTC	The first reduction in block reward
Second Halving	2016	12.5 BTC	Another reduction to control Bitcoin supply
Third Halving	2020	6.25 BTC	Further reduction in reward
Fourth Halving (2024 expected)	2024	3.125 BTC	Block reward reduced again

Bitcoin mining is the process by which new bitcoins are created and added to the Bitcoin network. The mining process involves miners using special hardware to solve cryptographic puzzles. Once a puzzle is solved, the miner is allowed to add a new block of transactions to the blockchain, and in return, they are rewarded with newly minted bitcoins.

The Mining Process

• Transaction Verification: Miners collect transactions from the Bitcoin network. These transactions are unverified at first.
  
• Block Creation: The transactions are grouped together into a block.
  
• Proof of Work: Miners compete to solve a cryptographic puzzle attached to the block. This is called Proof of Work.
  
• Block Addition: The first miner to solve the puzzle broadcasts the block to the network, and it gets added to the blockchain.
  
• Reward: The successful miner receives a reward in the form of newly minted Bitcoin and transaction fees from the block.
  

This process is the backbone of Bitcoin’s decentralized network, allowing transactions to be verified and adding new Bitcoin to the system.

How Does Mining Ensure Security?

Bitcoin’s mining process is designed to be decentralized and secure. Because miners are spread across the world and use computational power to validate transactions, no single entity can control the Bitcoin network. The Proof of Work mechanism ensures that every transaction is validated by many different miners, preventing fraud and double-spending.

This decentralized nature makes Bitcoin resistant to manipulation or censorship, unlike traditional currencies controlled by central banks.

Bitcoin Distribution

New bitcoins are distributed to miners as rewards for solving the cryptographic puzzles during the mining process. This distribution is carefully controlled through Bitcoin’s design, which limits the number of bitcoins that can ever be created.

The Halving Process

The number of bitcoins miners receive as a reward is halved approximately every four years. This process is called the Bitcoin halving and is programmed into Bitcoin’s code to ensure that the supply of Bitcoin is limited. As of 2025, the reward for mining a block is 3.125 BTC.

Each halving reduces the rate at which new bitcoins are introduced into circulation. This creates scarcity and increases the value of Bitcoin over time, making it more valuable as the total supply approaches its limit of 21 million bitcoins.

The next halving is expected to happen in 2028, and at that point, the reward will drop to 1.5625 BTC per block.

The Total Supply of Bitcoin

Unlike traditional currencies, Bitcoin has a fixed supply. Only 21 million bitcoins will ever be created, making it a deflationary asset. As the block reward decreases with each halving, the supply of new bitcoins entering circulation also slows down. This scarcity is one of the factors that give Bitcoin its value, and the eventual full supply of 21 million bitcoins will not be reached until around the year 2140.

Bitcoin Halving Timeline and Rewards

Halving Event	Block Reward Before Halving	Block Reward After Halving
2009 – 2012	50 BTC	25 BTC
2012 – 2016	25 BTC	12.5 BTC
2016 – 2020	12.5 BTC	6.25 BTC
2020 – 2024	6.25 BTC	3.125 BTC

The Role of Miners

Miners are the backbone of the Bitcoin network. They ensure that the Bitcoin blockchain is secure by validating transactions and creating new blocks. Without miners, the Bitcoin network wouldn’t function as it does today.

Why Do Miners Mine Bitcoin?

Miners are incentivized to mine Bitcoin because they receive rewards for their work. The primary incentive is the block reward, which gives miners new bitcoins. Miners also earn transaction fees from the transactions they include in the blocks they mine. These rewards help miners cover the costs of the high-powered computers they use and the energy consumed during the mining process.

Over time, as block rewards decrease due to halvings, miners will rely more heavily on transaction fees to maintain their profitability. This transition will make Bitcoin’s transaction fees increasingly important.

Environmental Impact of Bitcoin Mining

Bitcoin mining is energy-intensive, and this has led to concerns about its environmental impact. The high computational power required to mine Bitcoin consumes large amounts of electricity, with some mining operations relying on non-renewable energy sources. However, many miners are transitioning to renewable energy to mitigate these concerns, and efforts are being made to ensure that Bitcoin mining becomes more sustainable.

The Future of Bitcoin Mining

As Bitcoin approaches its maximum supply, mining rewards will continue to decrease. This will lead to a shift where transaction fees play a bigger role in rewarding miners. The transition to layer 2 solutions, such as the Lightning Network, may also help reduce the burden on miners and make transactions faster and cheaper.

Advancements in mining hardware and a shift toward renewable energy sources will be crucial for the long-term sustainability of the Bitcoin network.

Conclusion

Bitcoin is created through mining, a process where miners validate transactions and are rewarded with newly minted bitcoins. This decentralized method ensures Bitcoin’s security and scarcity, making it a unique digital asset. As Bitcoin’s block reward decreases, transaction fees will play an increasingly important role in supporting miners.

To stay ahead in understanding Bitcoin and its network, consider pursuing a Crypto Certification, which provides valuable insights into cryptocurrency and its underlying technologies. Additionally, a Data Science Certification can enhance your understanding of data structures and mining techniques. If you’re interested in expanding your business knowledge in the tech world, a Marketing and Business Certification can be beneficial as well.