How does Bitcoin work? How does it give rewards to miners?

Bitcoin is a decentralized digital currency that uses cryptography to secure and verify transactions as well as to control the creation of new units of a particular cryptocurrency. Transactions are recorded on a public ledger called a blockchain.

Miners play a crucial role in the Bitcoin network by maintaining the blockchain. They do this by using specialized software to validate transactions and add them to the blockchain. Miners are rewarded for their efforts by receiving newly created bitcoins as well as transaction fees.

The process of mining involves solving complex mathematical problems, and the miner who is first to solve the problem is rewarded with new bitcoins. The difficulty of these problems is adjusted by the Bitcoin protocol to ensure that new bitcoins are created at a steady rate and that the rate at which new bitcoins are created is cut in half every 210,000 blocks (about every four years).

Miners also earn transaction fees as an additional reward for their work. These fees are paid by users who want their transactions to be processed quickly and included in the next block.

In summary, Bitcoin mining rewards are two-fold: new bitcoins and transaction fees, both are given to the miner who solves the mathematical problems first and validate the transactions.

 

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