Currently, there are two things that miners make money:

• Minted money
• Transaction fees.

1. Minted Money – Within the Bitcoin protocol, 25 BTC is generated in every ten minutes. Mining is critical to the integrity of the Bitcoin protocol, so work should be encouraged to ensure the network is operational. However, the amount of BTC is halved every 4 years so that the profit of the mine is less and less available. However, mining is not just dependent on mining because there are small transaction fees whenever a transaction is made, which also goes to the miners. Currently, these make up a small portion of the profits, however, as the number of minted BTCs is small, transaction fees will begin to play a very important role in the BTC network.

2. Transaction Fees – As a result of the limit supply of bitoins can hit the currency becomes the deflationary currency. Currently, thousands of BTC are produced daily, which causes inflation, however once the BTC mine stops, the currency will stop inflating. If someone receives a few BTCs and then forgets his account, that person will have to delete a few BTCs, or at least a few thousand satoshis (subdivision of BTC equals ten nanobitcoins, or 1 / 100,000,000 of a bitcoin). This action, while not trivial as an individual, is a somewhat regular occurrence and will reduce the number of BTCs and increase the value of BTCs in the long run. This deflation, coupled with increasing popularity, will make it seem cheap to us in 10 years (now) and incredibly expensive in 100 years. Compare this to the US dollar (US dollar), because any American who listens to grandparents will remember that it used to cost 1 cent then, and now seems incredibly cheap to our modern economy. The important thing is that instead of governments printing more money and converting goods to higher prices, Bitcoins will be destroyed over time and the price of goods will be lower. Whether it is good or not depends on what you consider is good and how you view the economy.

Bitcoin has the mathematical scarcity of complete history. This scarcity can be verified by any member of the network and is controlled by a mechanism in the source code of Bitcoin. This algorithm allows the miners who create the blocks to obtain the newly minted Bitcoin. This subsidy helps the miners to cover the high cost of mining. However, every four years, the algorithm cuts the subsidy in half in an event called the halving. This process will continue until the year 2140, when the flow of new bitcoin will decrease from one satoshi per block to zero.

When a halving occurs, miner revenue is roughly cut in half. As with any industry, a 50% loss in revenue can force a business out of operation. In the case of Bitcoin, mining directly provides security to the network, so a flight of miners from the network could jeopardize Bitcoin’s security model. As the block subsidy trends towards zero, Bitcoin skeptics believe that low miner revenue could lead to lower security and a diminishing value proposition for Bitcoin itself.