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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 allow a performance of around two million transactions every day. At the time of writing, Bitcoin Cash is valued at $545.00 to Bitcoins $6,328.11.

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

Because its like gold mining in that the bitcoins exist in the protocols design (like the gold is underground), but they havent been introduced into the light yet (just as the gold hasnt yet been awakened ). 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 confirmed transactions and including them in the blockchain.

Backtracking a bit, lets talk about nodes. A node is a powerful computer that runs the bitcoin applications and assists to keep bitcoin running by participating in the relay of information. Anyone can run a node, you simply download the bitcoin applications (free) and also leave a certain port open (the drawback 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 which it knows, who will relay the information to nodes they know, etc.. That way it ends up getting around the entire 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 can they do so by solving a intricate mathematical mystery that's 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 data in the cube and passed via a hash function, creates 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 used 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 official source function which makes it impossible to forecast exactly what the output will be. So, miners guess the mystery number and use the hash function to the combination of the guessed number and also the data in the block. The resulting hash must begin 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 using a different block configuration). .

The first miner to get a resulting hash within the desired range announces its success to the remainder of the network. All the other miners immediately stop work on that i thought about this block and start trying to figure out the puzzle number for your next one. As a reward for its work, the victorious miner has some new bitcoin. .

In the time of writing, the payoff is 12.5 bitcoins, which in 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 whole lot of mining nodes competing for this reward, and it's a question of fortune and computing power (the further guessing calculations you can execute, the luckier you are).

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

And, the number of bitcoins given as a reward for solving the mystery will decrease. Its 12.5 now, but it halves every four decades or so (the next one is expected in 2020-21). The worth of bitcoin relative to price of electricity and hardware could extend up over the next few decades to partially 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 adjusted frequently, so that it requires on average about 10 minutes to process a block.

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

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