Bitcoins generating

[Fbsk9478]

Hi, how Bitcoin managing the process of "Bitcoins generating" for miners?
a) It generated all 21 mills tokens on the moment of genesis and kept aside part of it for payment to the miners.
b) It generated only part of 21 mills on the moment of genesis and continuously generating a new Bitcoins from the thin air on as needed base till it reached the max.
c) something else?
Thank you.

[1714905114]

1714905114

[1714905114]

1714905114

[1714905114]

1714905114

[ranochigo]

Bitcoin has a specific block subsidy as defined in the code as well as a halving every pre-defined amount of blocks. As a result, the supply of Bitcoin follows a geometrical progression; halving is per 210,000 blocks, total amount of Bitcoin in the first period is 210,000 * 50 = 10,500,000. Sum to infinity: 10,500,000/0.5. While this result of 21,000,000 only holds true if there is no limit to the decimal place, since the smallest denomination is a satoshi, the total possible supply is actually slightly less than 21 million.

The block subsidy is defined in the protocol and enforced by the node. Miners can include no more than the current enforced limit of the coins being generated which is 6.25BTC. The coins are included into the circulation by the use of the coinbase transaction in the block mined by the miner. The coinbase transaction (or generation transaction)[1] contains the block rewards but doesn't need any references to any TXID within the transaction or scriptsig. During the creation of the block, the miner will create a coinbase transaction that sends both the transaction fees within the block as well as the block rewards to their address as well as other relevant data (witness commitment, etc).

[1] https://blockchair.com/bitcoin/transaction/94218fd3c820f4b75c93af58ef560ac2839097eb767005d172f4515362a7684c

[DannyHamilton]

. . . The coinbase transaction[1] . . .

Unfortunately, the world hasn't yet reached a consensus on the definitions of words related to the technical aspects of Bitcoin.

In many sources, you may see this "coinbase transaction" referred to as the "generation transaction", and the "coinbase" may be more narrowly described as the input script of the generation transaction.

The sum of the values of the outputs of the generation transaction are allowed by the protocol to be no greater than the difference between:

The sum of all transaction inputs in the block plus the current block subsidy
and
The sum of all transaction outputs in the block

Effectively this means that the sum of the values of the outputs of the generation transaction can be no more than the current subsidy PLUS the sum of the transaction fees of all transactions in the block.

[Fbsk9478]

Isn't this "coinbase(generation) transaction" is an attractive backdoor for the hackers? Bitcoin is open source, right?

[ranochigo]

Isn't this "coinbase(generation) transaction" is an attractive backdoor for the hackers? Bitcoin is open source, right?

Nope it isn't. The open source nature of Bitcoin gives everyone the ability to review the code (provided that they have the technical competency to do so). It has little to no effect to any backdoors and conversely, any possible backdoors would be evident as you can see what the code does.

The generation transaction would only be included in the blockchain (or the current longest chain difficulty wise), if they're able to mine a valid block that further extends that chain. The consensus is reached by selecting the longest chain difficulty-wise. Given that the nodes which forms the network enforces protocol rules, there is no way for miners to be able to include more than the current block subsidy and the transaction fees in that coinbase transaction. Doing so would result in the entire block being invalid and gets rejected by the network.

[NotATether]

Isn't this "coinbase(generation) transaction" is an attractive backdoor for the hackers? Bitcoin is open source, right?

These days you can only get the rewards from the coinbase transaction if you find an extremely small hash, using several exahashes/s of hashpower from mining rigs, and no less. This costs a lot of money, because it all pulls megawatts of power, not to mention the enormous costs of buying all those miners in the first place.

So, a bitcoin mining operation will be at a loss initially but may become a net positive in the future if successful. Most aren't though, and that's what deters hackers (who would just be legitimately mining for themselves instead of trying to backdoor thousands of Bitcoin Core installations, which is infeasible) from mining and coinbase transaction rewards.