How is a bitcoin created or generated on the blockchain? (2024)

Con the creation of the ecosystem Bitcoin, there are many people who now choose to carry out their transactions, both national and cross-border, with this cryptocurrency. And it is that Bitcoin has not only been the first cryptocurrency created successfully, but also has the largest number of users of all. Hence, it is the most popular and is used as a reference currency for the others. Not to mention the many advantages it offers to its users.

But despite all this popularity, there are many people who still don't really know how it works. At this point, one of the most common questions is: How is a bitcoin created? For this, it is necessary to know that Bitcoin is three things: a software, a protocol and a currency. And said currency is totally digital, it does not exist physically.

Blockchain, the base in the construction of Bitcoin

The Bitcoin system is based on technology blockchain, Is open source and has a peer-to-peer (p2p) network de nodes. interconnected with each other. These nodes are in charge of receiving and processing all the information of the transactions carried out within the blockchain. This network of nodes and blockchain technology is what makes Bitcoin a totally particular, innovative and different form of money from those traditionally known. Anyone can join it, and it currently constitutes the network with the greatest computing power that exists. This is the foundation that creates every bitcoin that exists today.

The Bitcoin protocol is defined in itswhitepaper; And this indicates among many things, the way in which bitcoins are created. The blockchain is made up of a series of blocks chained or mathematically linked together. And each block is generated through a system called Proof of Work (PoW) o Proof of Work. This proof of work, leads all the nodes of the network to participate in the search for a valid solution to a complex mathematical problem that allows the generation of a new block. This search process is known as mining is.. And for this work, which requires great computing power and a lot of electrical energy, the nodes receive a bitcoin reward.

It is through the mining process that each new bitcoin is created or generated. In this way, with each block found, the mining nodes receive new bitcoins for their work, while keeping the system and the economy that sustains it running. But surely you will wonder: What processes participate in the generation of a BTC?

Process of generating a bitcoin unit

As we well know, governments around the world have a monetary system that is responsible for printing fiat money when they require it. In the world of Bitcoin and many cryptocurrencies (but not all) this is not the case. As you know, Bitcoins are generated through the digital mining process. Also Bitcoin is an exclusively digital currency that does not exist in the physical world: It is decentralized, and there is no government or entity behind it that regulates its issuance.

In this context, Bitcoin is designed and programmed to produce a fixed amount of coins approximately every 10 minutes. It is the users of bitcoin themselves, those who wish to provide computing power, who are responsible for carrying out this process, called mining. These network mining nodes must collect transactions that have been made by users and are in the mempool, add a blocking function and check the digital signatures of said operations.

Then will perform a process to find a valid hash to the math problem. The mining node that first finds the hash It will be who generates the new block and will receive the reward. Then you can include in your block all previously validated transactions. In addition to a coinbase transaction, that is, creating new currencies that will have its reward in bitcoins. These new created coins are put into circulation after a certain number of confirmations.

If a person wants to become a bitcoin miner, he currently requires specialized equipment and mining software. Among these teams are the ASIC, FPGA o GPU. In this way, you can use the team's resources to perform the complex mathematical calculations necessary to solve a block. Once you solve the riddle you will be able to generate the block, add it to the blockchain and receive the reward of new coins and commissions for all the work done.

It is important to note that in this mining process the hash function used is the SHA-256. Which allows to take any amount of data and convert it into a specific size string, known as a hash. It sounds easy to do but the truth is that the difficulty of this job is immense. A difficulty that is further increased thanks to a variable known as nuncio. This is a very high value random number that is adjusted from time to time in order to increase or decrease mining difficulty. The objective is to guarantee the greatest possible security of the network, preventing others from manipulating it at will.

Overview of the generation process

The Bitcoin system was designed in such a way that the creation of new currencies occurs in a fixed and predetermined way. The mining process becomes very competitive and profitable. Every time the number of miners in the network increases and new blocks are found at the defined rate, the difficulty of the system increases, which demands more computational power and electrical expenses.

In turn, with each new block generated, the rate of coin creation decreases automatically. This was intentionally designed by its creator, Satoshi Nakamoto, who established that there will only be approximately 21 million coins and that they will reach their maximum emission in approximately the year 2140. Once that number is reached, no new bitcoins will be created. Currently, the reward miners receive is set at 6,25 BTC until 2024, when it will be halved.