1.2 How Bitcoin Works

Bitcoin operates on a technology called the blockchain — a public, distributed ledger that records every transaction ever made.

The blockchain is maintained by a network of computers (nodes) around the world. Each node has a complete copy of the entire transaction history, making the system transparent and resilient.

Mining is the process by which new bitcoins are created and transactions are confirmed. Miners use specialized computers to solve complex mathematical puzzles in a process called Proof of Work.

When a miner successfully solves the puzzle, they get to add a new block of transactions to the blockchain and are rewarded with newly minted bitcoins. This is called the block subsidy.

The difficulty of the puzzle automatically adjusts every 2016 blocks (roughly 2 weeks) to ensure that blocks are found approximately every 10 minutes, regardless of how much computing power joins the network.