Mining is also the way by which new bitcoin are released into the system.
Whoever wins the competition for solving the cryptographic problem gets to add the new block of transactions to the blockchain – plus a reward comprising transaction fees and new bitcoin.
Transaction fees are the sum of fees paid for all transactions included in that block, which vary according to demand. These are bitcoin already in circulation.
On the other hand, block rewards also include entirely new coins. In fact, every bitcoin in existence has been introduced into the network via mining. The rate of new bitcoin has started at 50 per block in 2009, but this number is programmatically halved every four years as determined by the protocol.
The current reward is set at 6.25 bitcoin per block until 2024. This process will continue until all 21 million BTC are out there, at which point miners will only receive transaction fees.
There’s no way that anyone can arbitrarily create new bitcoin or mess with the issuance rate unless everyone (or at least an overwhelming majority) of the network agrees to change the protocol. And finding that agreement would be very, very hard.
This programmed scarcity (a combination of fixed supply with predictable issuance rate) completely removes any uncertainty around inflation.
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