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Insteadthey went with Solution 2. The resulting currency, known as bitcoin cash, increased the blocksize to 8 Mb in order to accelerate the verification process to permit 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 physical, so why do we call it mining

Since its similar to gold mining in the bitcoins exist in the protocols design (like the gold exists underground), but they havent been introduced 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 so as a reward for creating cubes of confirmed transactions and including them in the blockchain.

Backtracking a little, lets talk about nodes. A node is a powerful computer which runs the bitcoin software and assists to keep bitcoin running by participating in the relay of information. Anyone can run a node, you just download the bitcoin software (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, who will relay the information to nodes they know, etc.. This way it ends up getting around the whole network pretty fast. .

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

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(For trivia lovers, this number is called a nonce, which is a concatenation of number employed once. In the case 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 impossible to predict what the output will be. So, miners suppose the mystery number and use the hash function to the combination of the guessed number and also the data in the cube. The resulting hash must start with a pre-established number of zeroes.

Whats more, there may be several nonces that produce the desired result, or there may be none (in the event the miners keep trying, but with a different block configuration). .

The first miner to acquire a go to my blog resulting hash within the desired range announces its victory to the rest of the network. The rest of the miners immediately cease work on that block and begin trying to find out the puzzle number for the next one. As a reward for the own work, the victorious miner has some new bitcoin. .

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

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Though its not nearly as cushy a bargain as it sounds. There are a lot of mining nodes competing for this benefit, and it is a question of luck and computing power (the more guessing calculations you can perform, the luckier you are).

Also, the expenses of being a mining node are considerable, not only because of the powerful hardware needed (if you've got a faster processor than your competitors, you've got a better chance of finding the correct number before they do), but also due to the large amounts of power that running these chips consumes. .

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

The difficulty of the calculation (the necessary number of zeroes at the beginning of the hash string) is corrected frequently, so it requires on average approximately 10 minutes to process a block.

Why 10 minutes that's the amount of time that the bitcoin developers think is necessary to get a steady and diminishing flow of new coins until the maximum number of 21 million is reached (anticipated some time in 2140).

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