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Where does the real money when someone buys a bitcoin?

I understand that if you buy from someone or an exchange you are paying them in real money but who gets the money for a newly mined bitcoin?

Highly Irregular
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user70213
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  • This does not appear to be a duplicate of the question in the above comment. This question is about newly *mined* bitcoins. – Hannah Vernon Dec 21 '17 at 18:30
  • @user70213 Other currencies are only involved when transacting. There is no other currency involved in mining - someone just gets a newly created BTC. They're free to sell it, or keep it, or give it away. – Pieter Wuille Dec 21 '17 at 22:18
  • @MaxVernon It's at least a partial duplicate. The question about newly mined coins seems unrelated, as there is no other currency involved at all. Perhaps it's worth splitting the question up. – Pieter Wuille Dec 21 '17 at 22:19

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Newly mined bitcoins don't "cost" anything (I'm simplifying - there are costs such as electricity and the cost of the mining hardware).

New bitcoins are simply discovered by the miner who is lucky enough to discover them. The concept is similar to finding gold in the ground. Once you find the gold, you take it to a market and sell it to someone who wants gold, and is willing to provide money in return for gold. In the case of bitcoin, a miner runs a large number of mathematical equations searching for an answer that matches the difficulty requirements, and other technical criteria. Once the answer is found, a block is produced containing the answer along with a number of new bitcoins. The miner then either retains the new bitcoins, or trades them for some other currency.

Hannah Vernon
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