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Transition to Web3 - Course 2 | Transactions and Bitcoin

The money can be injected (i.e. new coins can be created) in many different ways. This can be done by giving the initial node lots of money. Or, by giving every new node some money... Or, maybe by regularly adding some money to random nodes. Each method creates different incentives.

The Bitcoin system creates new coins in a way to incentivize integrity of the whole system. New coins are created with a piece of code every time a new block is mined by nodes. 

As a result, the system incentivizes more people to become nodes and more of them to become miners. The more miners there are, the more computation power will be needed to change the records of transactions and hack the system. 

As it gets harder and harder to hack the system, the blockchain and the economy it creates becomes more secure and, as a result, the coins become a more preferred currency.




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