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You've definitely got the right idea.

It's not mentioned in the video, but mining is also how new currency is generated - Miners are rewarded for finding blocks (thus there is incentive to mine).

And to answer your question - In the early days, miners were hobyists and simply operated at a loss. The value of coins grew roughly along with the "hash power" of the collective network (as you might expect). And at the same time, the reward for finding new blocks is constantly shrinking.




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