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Instead, they went with Solution 2. The resulting currency, called bitcoin cash, increased the blocksize to 8 Mb in order to accelerate the verification process to allow a performance of around 2 million transactions per day. At the time of writing, Bitcoin Cash is valued at $545.00 to Bitcoins $6,328.11.

When you hear bitcoin mining, you envisage coins being dug from the ground. But bitcoin isnt bodily, so why do we call it mining

Because its similar to gold mining in that the bitcoins exist in the protocols design (just as the gold is underground), but they havent been brought out into the mild yet (just as the golden hasnt been dug up). The bitcoin protocol stipulates that 21 million bitcoins will exist at some point.

They get to perform this as a reward for creating blocks of validated transactions and including them in the blockchain.

Backtracking a bit, lets discuss nodes. A node is a powerful computer that runs the bitcoin software and helps to keep bitcoin running by participating in the relay of information. Anyone can run a node, you simply download the bitcoin software (totally free ) and also leave a certain port open (the downside is the fact that it consumes energy and storage space the network at time of writing takes up about 145GB).

One node will send information to some nodes that it knows, that will relay the information to nodes that they know, etc.. That way it ends up getting around the whole network pretty quickly. .

Some nodes are mining nodes (usually known as miners). These group outstanding transactions into blocks and add them into the blockchain. How do they do this By solving a intricate mathematical puzzle that is a portion of the bitcoin program, and including the answer in the cube. The mystery that needs solving is to find a number that, when combined with all the information in the block and passed through a hash function, produces a result that is within a certain range.

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(For fiction fans, this number is known as a nonce, which can be a concatenation of number employed once. In the instance of bitcoin, the nonce is an integer between 0 and 4,294,967,296.)

How do they find this number By guessing at random. The hash function which makes it click to read more impossible to predict exactly what the outcome will be. So, miners suppose the puzzle number and apply the hash function to the combination of that guessed number and also the data in the cube. The resulting hash has to begin with a pre-established number of zeroes.

Whats more, there may be several nonces that make the desired result, or there might be none (in which case the miners keep trying, but using a different block configuration). .

The first miner to acquire a resulting hash within the desired range announces its success to the rest of the network. All the other miners immediately cease work on that block and start trying to find out the mystery number for your next one. As a reward for the own work, the victorious miner gets some new bitcoin. .

In the time of web link writing, the reward is 12.5 bitcoins, which at time of writing will be worth nearly $200,000.

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Although its not nearly as cushy a bargain as it sounds. There are a lot of mining nodes competing for that reward, and it's a question of luck and computing power (the more guessing calculations you can execute, the luckier you're ).

Additionally, the costs of being a mining node are considerable, not only due to the effective hardware needed (if you have a faster processor than your opponents, you've got a better chance of finding the right number before they do), but also because of the large amounts of electricity that running these chips consumes. .

And, the number of all bitcoins given as a reward for solving the puzzle will decrease. Its 12.5 now, but it halves every four decades or so (the next one is anticipated in 2020-21). The worth of bitcoin relative to cost of power and hardware could extend up over the next few years to partially compensate this reduction, but its not certain. .

The difficulty of this calculation (the required number of zeroes at the beginning of the hash string) is adjusted frequently, so it takes on average about 10 minutes to process a block.

Why 10 minutes that's the amount of time the bitcoin developers think is necessary for a steady and diminishing flow of new coins until the highest number of 21 million has been reached (expected some time in 2140).

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