The proposal for Bitcoin was created in 2009. Credited to the name Satoshi Nakamoto, however, it remains a mystery whether this was a pseudonym for one individual or for a group of people.
This report, or Whitepaper, describes in depth the methods to employ what became Bitcoin and the general intent of such a creation. The coins themselves are essential given out as payment for taking part in the functions of the network.
Bitcoin is based on an open-sourced, participatory public network that simulates market-based economic competition, and is inspired by the risk vs. reward concepts of game theory to assure collaborative engagement of the network while preventing the ability for any participants to cheat the system with a consensus protocol that utilizes high-level mathematics and cryptography.
The coins emerge as a reward for supporting this network
The term “mining” is used to describe this process that confirms that viability of transactions, summarizes them into a smaller piece of data that are the “blocks” of the blockchain. This “hashing” occurs after a computer connected to the Bitcoin Blockchain receives a transaction signal, and successfully solves the algorithm.
This interconnectedness ensures that no change could ever be made to a transaction without it altering the entire blockchain.
The quantity of Bitcoin released in this process is limited and concrete
It was set and will remain as dictated by the original Whitepaper. The creators accounted for increases in computing speed by writing automated adjustments into the protocol. There is no person or company running Bitcoin; it was made to operate totally independently.
When computing capacity starts to reduce the time taken to verify transactions into blocks, the difficulty of the algorithm to be solved is raised to maintain a “block time” of roughly 10 minutes.
Because there is a finite number of Bitcoins (21 millions is the limit to be exact), it is a direct computation of un-mined coins and intervals of 10 minutes to determine the point at which all Bitcoins will have been mined out into the network.
This is right around the year 2140.
Because of the growing scarcity of the coins, and the nature of the blockchain, the reward for mining is consistent of more value than attempting to steal from or sabotage the network. When there are no longer Bitcoins to mine, they will come only from exchanging between those who already owned them.
