Bitcoins are created from bitcoin mining (adding transactions to a public ledger). An algorithm controls mining difficulty and total coin creation (21 million). Because coins are created and distributed via a controlled algorithm (as opposed to a central bank), the bitcoin system avoids inflation of the currency and ensures as steady flow of new coins.

Where do Bitcoins come from?: When a miner cracks an algorithm to record a block of transactions to a public ledger called a blockchain. When the “block” is added to a “blockchain” new Bitcoins are created.

Bitcoins are Digital Representations of Currency

Bitcoins themselves aren’t real, tangible things that you can hold or use in real life; they are digital representations of currency. Once a new coin is created, a record of the existence of that coin is held publicly and the current owner of that coin has a private code that connects back to those coins. So, if we thought of the entire concept of bitcoin having value, we could think of owning bitcoin as more akin to owning shares in the overall bitcoin network.