I read that Mining of bit coins generate blocks and each block is rewarded with certain bit coins. So, from where bit coins are generated?


The new bitcoins are generated as a special transaction called a Coinbase transaction, which is the very first transaction in a block. That transaction has special inputs that don't spend previous transactions, so the bitcoins are completely new. The miners create this transaction when they create a block to be mined, paying the block reward to themselves. Thus if they are the successful miners of the block, the transaction pays them and they receive the block reward.

Note that the block reward is currently 12.5 BTC per block not 25, as of the reward halving on 2016-07-09.

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