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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 procedure to permit a performance of around 2 million transactions per day. In 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 (just as the gold is underground), but they havent been brought out into the light yet (just as the golden hasnt yet been awakened ). 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 applications and helps keep bitcoin running by participating in the relay of information. Anyone can run a node, you simply download the bitcoin software (totally free ) and leave a certain port open (the downside is that it consumes energy and storage space the network at time of writing takes up about 145GB).

One node will send information to a few nodes that it knows, who will relay the information to nodes they know, etc.. That way it ends up getting around the whole network fairly fast. .

Some nodes are mining nodes (usually known as miners). These set 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 this bitcoin app, and including the answer in the block. The puzzle that needs solving is to find a number which, when combined with the information in the cube and passed through a hash function, creates a result that is within a certain range.

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(For fiction fans, this number is called a nonce, which can be a concatenation of number used once. In the case of bitcoin, the nonce read the article 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 outcome will be. So, miners suppose the mystery number and use the hash function to the combination of that guessed number and the information in the block. The resulting hash must begin with a pre-established number of zeroes.

Whats more, there might 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 acquire a resulting hash within the desirable range announces its success to the remainder of the network. All the other miners immediately stop work on that block and start trying to figure out the puzzle number for the next one. As a reward for its own work, the victorious miner has some new bitcoin. .

In the time of writing, the reward is 12.5 bitcoins, which at time of writing is worth nearly $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 that benefit, and it's a question of fortune and computing power (the further guessing calculations you can execute, the luckier you're ).

Additionally, the expenses of being a mining node are considerable, not only due to the powerful hardware needed (if you've got 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 electricity that running these chips consumes. .

And, the number of all 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 value of bitcoin relative to cost of electricity and hardware could go up over the next few years to partly compensate this reduction, but its not certain. .

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

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

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