Satoshi Nakamoto, whose October 2008 white paper “Bitcoin: A Peer-to-Peer Electronic Cash System” described a framework for what would become bitcoin. Bitcoin was launched in 2009, and since then every Bitcoin transaction that’s ever occurred is recorded on the blockchain. The blockchain is a distributed ledger, similar to a spreadsheet. It is maintained and monitored by a decentralized network of tens of thousands of computers all over the globe. These monitors are called nodes. Nodes record the blockchain and validate new blocks that are added to the chain.
New transactions are bundled into blocks and added to the blockchain. In order to provide validity to new blocks, proof of work must be submitted that solves a difficult cryptographic equation. This process of this equation solving is called mining. The first miner to solve the equation is rewarded with Bitcoin. This mining process is the only way new minted Bitcoins are released into a finite circulation supply of 21 million.
Once Bitcoin is awarded, the process starts all over again and miners compete on solving the next block chain equation. Current block reward amounts to 6.25 Bitcoin per block, which occur approximately every 10 minutes 24/7.
Note, Bitcoin reward amounts are cut in half (halving) approximately every four years. Bitcoin halving imposes synthetic price inflation in the cryptocurrency’s network and cuts in half the rate at which new bitcoins are released into circulation. The rewards system is expected to continue until the year 2140, when the proposed 21 million limit for bitcoin is reached.