What is Bitcoin mining?
In order to ensure accuracy and consistency in the Bitcoin ledger, transactions are added to the ledger only at fixed intervals. This fixed interval process is required to ensure separation between existing and new transaction data on the Bitcoin network.
The process to add a new transaction to the Bitcoin ledger includes verifying the details of all existing and new transactions. This process requires massive amounts of computational power.
Bitcoin obtains this computational power from people across the internet, who volunteer their computational resources. Through these massive calculations, new entries are added to the Bitcoin ledger.
In return for donating their computing resources to the Bitcoin network, the volunteers who have succeeded in verifying and adding new transactions to the Bitcoin ledger are rewarded with a payment in Bitcoin. This payment is a reward to the volunteers for participating in the verification process, and contributing to the overall health of the Bitcoin network.
This Bitcoin reward payment comes in the form of newly issued Bitcoin, released to the volunteer at the moment the transaction is successfully verified. In short, the reward payment doubles as a currency issuance mechanism.
Rather than using their computing power to play games or surf the web, these volunteers have chosen to dedicate their resources to maintaining the Bitcoin network. This new issuance payment is a reward for that contribution.
This is the crux of the mining process. There are now people and companies all over the world who run businesses based on Bitcoin mining. Thanks to these people and companies, the integrity of Bitcoin is maintained today.
New Bitcoins can only be generated through this mining process. Those who believe in the concept of Bitcoin dedicate their efforts towards this process of verifying transactions and adding to the Bitcoin ledger.
Will Bitcoins continue to be issued forever?
In short, the answer is no. The amount of Bitcoin to be generated is fixed, and was decided at the time the Bitcoin protocol was released. This was done to avoid any confusion, or inflation caused by a sudden influx in the amount of Bitcoin.
The total amount of Bitcoin to be issued is fixed at 21 million BTC, and this amount will be reached by the year 2140. Once reached, there will be no further new issuances.