0

Central banks create money supply. Who creates bitcoin supply? Is it the miners? The dollars go into someone's pocket when bitcoins are first purchased for dollars. Is it like tulip bulbs?

1

Sometimes Google can be a good resource. I recommend this article of the Bitcoin wiki.

As a summary, Bitcoin are created by miners in a way that conforms with the protocol. All users can verify that miners follow the protocol rules when generating coins, so they can only generate a limited supply.

Every block, an amount of coins is generated and that amount halves every 4 years. In 2009, it started with 50 bitcoins per block. Fast forward to 2017, the block reward is only 12.5 bitcoins anymore. Decreasing like that over time, eventually the reward will drop below the lowest possible amount in Bitcoin (1 satoshi = 0.00000001 BTC) and go to zero.

Ultimately the total supply will be slightly less than 21 million bitcoins.

To respond to your question, bitcoins are not "first purchased for dollars". Instead, they are generated and might never be sold for dollars at all. They are just owned by the miners that generated them. When they are sold for another currency on an exchange, they are no different than other coins that have been in circulation for a long time. There is no such thing as an "issuance for dollars".

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.