How does bitcoin work? Who actually pays for the mining done?

[Isaak Brenner]

How does bitcoin work? Who actually pays for the mining done?

[1714976206]

1714976206

[Harri Wolter]

In my experience, it’s easier to get a hang of BitCoin if you start thinking about it in terms of gold.

[frery]

How does bitcoin work? Who actually pays for the mining done?

Bitcoin's job is a string of codes, and the miners' fees come from the transaction fees

[Albert211994]

How does bitcoin work? Who actually pays for the mining done?

It is easier to understand bitcoin if you read the whitepaper. here's the link

https://bitcoin.org/bitcoin.pdf

[buwaytress]

How does bitcoin work? Who actually pays for the mining done?

You might want to read from actual recognised resources, beginning first at bitcoin.org. Various ways to explain how it works, from the basic picture probably most forum users even understand, to the highly technical that would only make sense to programmers. I generally introduce it just the way the white paper did.

Nobody pays for mining. It is completely voluntary - anyone can choose to mine, though because of today's difficulty and complexity, entry barriers are quite high (technologically and financially). Currently, though, miners earn a reward for finding new blocks ( 12.5 new bitcoins generated) and they keep the fees included in the transactions the include in those blocks. Thanks to demand and the appreciation of Bitcoin value, this has become quite profitable.

[sergionero]

Mining is payed by bitcoin buyers.
Daily emission * price = mining reward
buyers pay miners by pushing price higher.

[YzzyGo]

In order for you to understand bitcoin, first you will have to learn about the blockchain technology, which is the backbone of every cryptocurrency we have to date. It acts as a ledger with all the transactions, number of coins generated, addresses, etc on the crypto built on top of it. It is decentralized accross all the miners or nodes all over the world so not one entity holds all the information, which in turn gives better security for the transactions.

Miners are paid with coins generated from the blockchain for every block of transactions that they decode. Just wiki the blockchain for further reading.

[hott_staff]

One of the best videos explaining how bitcoin work is this: https://www.youtube.com/watch?v=Lx9zgZCMqXE. It's technical, but allows you to understand a lot about how it works.

Regarding the pay for the mining, there are two sources of income: First are the bitcoins that are rewarded for each new block discovered, but this reward is going to vanish in a few years because the amount given as a reward is halved every 210,000 blocks. So around 2100 there will be no reward left, because the number of bitcoin that will appear is limited to 21 million.

The second source of income for the miners is the fee payed by those who want their transaction added to the blockchain.

[MaximMax]

People making a transaction.

There is essentially a market for transaction fees. People making transactions don’t HAVE to attach a fee, and miners don’t HAVE to accept any particular transactions on a block. Because there is limited space in a block, people who attach the highest fees will get their transaction included on a block, because miners want to make the most money.

Miners also get money just by actually mining and winning the computational race. When a miner “wins” a block, they get a certain number of bitcoins (this amount started at 50 and is halved every four years).