New bitcoins are minted in batches by computers solving a complex mathematical puzzle. Everything its solved, the system pays out a batch of bitcoin. By design though every batch gets harder to mine than the last one, and mining is already outside of the range of home hardware. People who want to get into mining now by serious dedicated rigs that are expensive and cost a lot to run. They do this because they believe the bitcoins that they mine, while currently probably less than the value of the rig and electricity, will be worth far more in the future.
Mining has very little impact on the price of a single bitcoin since it happens so slowly. There are 13 million or so bitcoins in existence just now, and there will be maybe 100,000 or so mined this year, but that drops off quite rapidly now because remember it gets harder and harder. It'll actually take about another 125 years to completely mine it out (the total number possible is capped at 21 million).
If there are 13 million bitcoins and then you suddenly doubled it to 26 million, then every bitcoin would be worth half as much because you've diluted the supply. But its designed to only release bitcoins slowly so exactly that scenario does not happen, and its only going to get slower.
You have to calculate a very complicated, power intensive equation. It could be similar to creating a new prime number. Each time you find the biggest prime number it becomes much more difficult to find the next biggest. I am not sure it affects the Bitcoin price but it is un-economical to mine bitcoins as the cost of the equipment and the running costs outweigh the vaslue of coins mined.
That's hysterical! Very funny! :)
http://www.bitcoinget.com/?r=1LKeto9H2ew...
People pay for the bitcoins to be mined. Etc, the above site pays you in bitcoins for the task you've completed
Just curious as to how Bitcoin is mined and how this mining effects the price of Bitcoin.
