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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 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 that the bitcoins exist in the protocols design (like the gold is underground), but they havent been introduced into the light yet (like the golden hasnt yet been awakened ). 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 to 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 drawback is that it consumes energy and storage space the network at time of writing carries up about 145GB).

One node will send information to a few nodes that it knows, who will relay the information to nodes that they know, etc.. That way it ends up getting around the entire 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 a portion of the bitcoin program, and including the answer in the cube. The puzzle that needs solving is to find a number that, when combined with all the data in the cube and passed through a hash function, creates a result that is within a certain range.

(For fiction fans, 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.)

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How can they find this number By guessing at random. The hash function makes it impossible to predict what the outcome will be. So, miners guess the mystery number and apply the hash function to the combination of the guessed number and 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 produce the intended 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 victory to the rest of the network. The rest of the miners immediately cease work on that block and start trying to figure out the puzzle number for the next one. As a read what he said reward for its work, the victorious miner has some new bitcoin. .

At the time of writing, the reward is 12.5 bitcoins, which in time of writing visit will be worth almost $200,000.

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

Additionally, the costs of being a mining node are considerable, not only due to the powerful hardware needed (if you have a faster processor than your competitors, you have a better chance of finding the right number before they perform ), but also because of the large amounts of power that running these processors 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 years or so (the next one is anticipated in 2020-21). The worth of bitcoin relative to cost of electricity and hardware could extend up during the next few years to partly compensate this reduction, but its not certain. .

The problem of this calculation (the necessary number of zeroes at the beginning of the hash string) is corrected 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 for a steady and diminishing flow of new coins until the maximum number of 21 million is reached (anticipated some time in 2140).