Bitcoin Mining costs energy (electricity) and therefore a lot of money. So why should miners be willing to bear these costs? And where do new Bitcoins come from?
The Block Reward
The miners receive a reward for their computing power. This is also called the Block Reward. It is the reward that may be awarded to the Miner who is the first to find the solution to the proof-of-work puzzle.
However, only one of the candidates wins the race, so only one Miner gets the Block Reward. The miners compete with each other in the search for new blocks. Each time someone successfully solves the puzzle and creates a hash, they currently receive 12.5 Bitcoins. The block chain gets an update through the hash and everyone gets to know about it. This incentive system rewards the mining that keeps the transaction processing going.
The Block Reward consists of:
- Transaction costs
- Coinbase transactions (Bitcoins)
