How are new bitcoin created?
Correct answer
Answer C: Through issuance in valid blocks.
Quick explanation
When a miner adds a valid block, they may receive a set amount of newly created bitcoin. This issuance per block is cut in half at each halving. Since the 2024 halving, it has been 3.125 BTC per block.
Detailed explanation
Every valid block begins with a special transaction, the coinbase transaction. It has no normal previous payment input. Instead, the miner may claim the block subsidy allowed by consensus rules plus the fees from included transactions.
Only the block subsidy creates new bitcoin. Transaction fees consist of existing bitcoin that users offer for including their transactions. Full nodes check that a block does not claim more new units than its height permits. A block with an excessive coinbase payout is invalid and rejected by rule-following nodes.
This does not mean every mining attempt creates new bitcoin. Only when a miner finds a valid block and the network accepts it can the permitted payout take effect. In pool mining, the payout received is subsequently distributed under the pool's rules. Initial issuance remains tied to a valid block and its coinbase transaction.
Example or everyday application
A miner finds a valid block. In its first transaction, the miner claims the allowed subsidy and fees from the included payments. Only the subsidy increases the amount of bitcoin issued so far.
Common misconception
Many confuse mining with ordinary transfers or believe exchanges issue new bitcoin.
What the sources support
The Bundesbank explains the creation of bank deposits through lending. Bitcoin documentation shows a different mechanism: new bitcoin are issued under fixed rules as a block subsidy.