I am wondering how the Bitcoin program makes profit if there are no advertisements or taxes? How do the owners make money off of this?
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2 Answers
There are no "owners" of bitcoin. It is like a protocol or algorithm, such as HTTP or SHA256. No one made money creating the program; it's free and open source!
However, there are people who make money by "mining". From the bitcoin wikipedia page:
Bitcoins are awarded to Bitcoin "miners" for the solution to a difficult proof-of-work problem which confirms transactions and prevents double-spending.
Miners can also get extra bitcoins from voluntary transaction fees. In every transaction, it is recommended to pay a tiny fee so that miners will have an incentive to actually compute your transactions in the next block. Without a miner to verify your transactions, there is no way you or your payee can ensure that the bitcoins transferred are valid.
Bitcoin is an open-source project - the developers devote their free time to work on it and don't necessarily do it for profit. Other crypto currencies sometimes come pre-mined, or the developers don't share them too quick in order to create a supply of coins for themselves only to sell it for profit later. From what I know, this wasn't the case for Bitcoin.
However, the developers can be getting money from various donations. In case of Bitcoin, the Executive Director of the Bitcoin Foundation has claimed that one of the goals of the Foudation for 2013 is to
Begin to pay Gavin’s salary and get him some budget for the core development team
Which can imply that the future development of the Bitcoin project will be funded at least partially by the Foundation.
answered Oct 1, 2012 at 14:42
