TheBlock
Bitcoin combines a 21 million coin supply cap with a peer-to-peer ledger maintained by independent participants. Launched in 2009, the network uses Proof of Work mining to add blocks, while nodes check that proposed blocks follow its rules.
Miners compete to find valid hashes and earn newly issued Bitcoin plus transaction fees. Halvings reduce the new-Bitcoin portion of their rewards, creating a predictable issuance schedule. Hash rate and mining difficulty measure different aspects of the network, while market capitalization combines price and circulating supply.
Users authorize transactions with private keys, which must be protected alongside wallet recovery phrases. Bitcoin transactions spend unspent outputs and can return change; transactions waiting for inclusion in a block sit in the mempool.
Frequently asked questions
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How does Bitcoin control the supply of new coins?
Bitcoin has a 21 million coin supply cap. New Bitcoin is issued through mining rewards, and halvings reduce the new-Bitcoin portion of those rewards over time.
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What do Bitcoin miners earn for adding blocks?
Miners compete to find valid hashes and can earn newly issued Bitcoin and transaction fees when they add a block.
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How do Bitcoin nodes contribute to network security?
Independent nodes check proposed blocks against the network's rules before accepting them.
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Why must Bitcoin wallet recovery phrases be protected?
Anyone who obtains a private key or recovery phrase may be able to control the associated funds.
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What happens to a Bitcoin transaction before block inclusion?
A valid transaction may wait in the mempool until it is included in a block. Transaction fees help miners decide which transactions to include.
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