Certified Bitcoin Professional Practice Exam

How many Bitcoins are generated with each new block mined?

1. 6.25

2. 12.5

3. 25

4. 50

The correct answer is: 6.25

The generation of new Bitcoins per block is known as the block reward, which is an incentive for miners to validate and add transactions to the blockchain. As of the current protocol, each newly mined block rewards the miner with 6.25 Bitcoins. This reward is halved approximately every four years during an event known as "the halving." The halving was designed into the Bitcoin protocol to control the supply and inflation of Bitcoin, ensuring that it becomes scarcer over time as more blocks are mined. The rewards have decreased over time from the initial 50 Bitcoins per block at Bitcoin's inception, to 25, then to 12.5, and currently to 6.25. This systematic reduction in rewards contributes to the overall deflationary nature of Bitcoin, making it a finite resource similar to precious metals like gold. Understanding the halving and its implications is crucial for grasping Bitcoin's economic model and overall impact on its scarcity and value.