The Purpose Of Mining

amount of bitcoins

The purpose of mining is to process transactions in blocks, roughly one every 10 minutes.The fact that mining also earns an award to the miner is the method chosen to provide an incentive to ensure that there is enough mining occurring out there.  During this bootstrap phase, there is a lot of currency issued … about 7,200 per day.  

In under 18 months, that will drop by half, to about 3,600 per day.  And will continue decreasing years after that.Transaction fees are not partially supporting mining, and as the amount of currency issued shrinks, those fees will become the primary compensation for the mining.

Written on 10 Jun 2011.