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Insteadthey went with Solution 2. The resulting currency, called bitcoin cash, increased the blocksize to 8 Mb in order to accelerate the verification process to permit a performance of around two million transactions every day. In 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. However, bitcoin isnt bodily, so why do we call it mining

Because its like 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 (like the golden hasnt been dug up). The bitcoin protocol stipulates that 21 million bitcoins will exist at some point.

They get to do this as a reward for creating cubes of confirmed transactions and including them in the blockchain.

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

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

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

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(For trivia lovers, this number is known as a nonce, which can be a concatenation of number used once. In the case of bitcoin, the nonce is an integer between 0 and 4,294,967,296.)

How can they find this number By guessing at random. The hash function which makes it impossible to forecast what the output will be. So, miners guess the puzzle number and use the hash function to the combination of that guessed number and also the data in the cube. The resulting hash has to start with a pre-established number of zeroes.

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

The first miner to get a resulting hash within the desirable range announces its victory to the rest of the network. The rest of the miners immediately stop work on that block and begin trying to figure out the mystery number for your next one. As a article reward for the own work, the victorious miner gets some new bitcoin. .

At the time of writing, the payoff is 12.5 bitcoins, which at time of writing will be worth almost $200,000.

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Although its not nearly as cushy a deal 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 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 perform ), but also because of the large amounts of electricity that running these processors consumes. .

And, the number of bitcoins awarded as a reward for solving the puzzle will decrease. Its 12.5 now, however, it pits each four years or so (the next one is anticipated in 2020-21). The value of bitcoin relative to cost of electricity and hardware could extend up during the next few decades to partly compensate this reduction, but its not certain. .

The problem 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 for a continuous and diminishing flow of new coins until the maximum number of 21 million is reached (expected some time in 2140).

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