Is new supply of bitcoin only brought about due to miners selling their mined bitcoins or does the mining process distribute bitcoin back into the system in addition to the miners reward/transaction fee?
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It's not clear to me what you're asking about. Which bitcoin could be "distributed back into the system"?– Pieter WuilleCommented Jan 7, 2023 at 16:47
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2 Answers
Newly generated Bitcoin go only to the miners that find the blocks. In order for the new supply to be circulated, those miners will need to sell the Bitcoin that they have earned.
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I was a little unsure on whether the mining process filtered supply back into the network in addition to their rewards so you have answered my question. Thanks Andy.– TomCommented Jan 7, 2023 at 16:53
The block reward consists of two parts, the transaction fees that are paid by users to the miner that confirms their transaction, and the block subsidy, of freshly minted coins. The only way new coins were ever added to Bitcoin's money supply is per the block subsidy. Hence, all coins in the supply were at some point found by a miner and then put into circulation when they spent or sold them.
