How are bitcoin created?

Posted by Zachary Crockett

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An illustrated guide to bitcoin mining, blockchains, and the “minting” process of cryptocurrency’s most popular coin.

Every time bitcoin is proclaimed to be dead, it seems to surge back, buoyed by bullish investors, favorable legislation, and tech titans’ tweets.

At this point, nearly everyone has heard of bitcoin. But many folks still don’t quite understand how the currency is created.

It’s not printed like cash. It’s not a physical object like a gold bar. It’s not stored on a piece of plastic like a debit card. It just exists somewhere in a vast digital expanse until it’s excavated into circulation by a so-called bitcoin miner.

In this illustrated guide, we’ll cover the following:

  • How bitcoin is created (a process called mining)
  • How the economics of mining have changed over time
  • The effects this process has on power consumption

To help explain all of this, we’d like to introduce you to a man named Willy “Wild Eyes” Tibbs.

Wild Eyes made a fortune in the California Gold Rush in 1849. Now — 170 years later — he’s back from the grave for his next prospecting adventure. Click to meet Willy