As inventions go, they put it up there with the lightbulb and telephone. Proof-of-Work is considered a marvel by bitcoin maximalists. In fact, even if an attacker were to marshal 100 percent of the network hash rate, he would need over two years to completely rewrite the ledger dating back to January 3, 2009. Those who expend electricity to verify transactions have a strong incentive to maintain the ledger’s integrity, and because PoW makes the cost of writing a block punishingly high, the security of the bitcoin network is more robust than it’s ever been. Based on bitcoin’s predictable issuance model, the final coin will be mined some time around 2140.Īgainst all odds, Proof-of-Work has kept bitcoin ticking along for 13 years now with no recorded instances of double-spending. Of course, the currency does have a hard cap of 21 million bitcoins – so nodes can’t go on "producing" new bitcoin ad infinitum. Just as gold-mining is the only way to increase the supply of the world’s most valuable precious metal, bitcoin mining is the only way to increase the supply of bitcoin. This subsidy is then added to the sum of the transaction fees held in the block that is being mined to make up the block reward.
The eponymous blockchain, which recently celebrated its 13th anniversary, depends on a Proof-of-Work (PoW) consensus algorithm that compels miners to solve mathematical problems that are difficult to solve but easy to verify.Īmid fierce competition from rival miners, PoW math problems are tackled and deciphered in exchange for a set quantity of bitcoin known as a block subsidy.
Mining, of course, is the process that brings fresh bitcoin into being.