How to explain Bitcoin Whitepaper to a 8 year old kid - Part 5
Incentive - Why miners work so hard and stay honest
Every time a miner finishes a new block, they get to write a special transaction at the top. This creates new coins out of thin air — and gives them directly to the miner. Thats how new bitcoins are born!
Like Gold Mining
Mining Bitcoin is like digging for gold. Gold miners use shovels and energy to find gold in the ground. Bitcoin miners use CPUs and electricity to find new bitcoins in the blockchain.
Transaction Fees Too!
Besides new coins, miners also earn fees from every transaction in their block. So each block reward = new coins + transaction fees.
Reclaiming Disk Space
Every time miners add a new block, the blockchain gets bigger. Satoshi invented a clever shortcut using Merkle Trees. Old transactions can be trimmed away and just keep the root hash — saving tons of space!
In short:
- 💎 Miners get new coins + fees for honest work.
- ⚡ Its more profitable to play fair than to cheat.
- 💾 Bitcoin compresses old data using Merkle Trees.
P.S. The content was assisted by AI