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Instead, they 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 allow 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 about 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 do this as a reward for creating cubes of validated transactions and including them in the blockchain.

Backtracking a little, lets discuss nodes. A node is a powerful computer which runs the bitcoin software and helps keep bitcoin running by participating in the relay of information. Anyone can run a node, you just download the bitcoin applications (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, that 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 referred to as miners). These group outstanding transactions into cubes and add them to the blockchain. How do they do so by solving a complex mathematical mystery that is a portion of this bitcoin app, and including the answer in the block. The mystery that needs solving is to find a number that, when combined with all the information in the cube and passed via a hash function, produces a result that is within a certain range.

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(For trivia lovers, this number is called 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 makes it impossible to predict exactly 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 has to begin with a pre-established redirected here number of zeroes.

Whats more, there might be several nonces that produce the intended result, or there might 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 rest of the network. The rest of the miners immediately stop work on that block and start trying to find out the puzzle number for the next one. As a reward for its own work, the victorious miner gets some new bitcoin. .

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

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Though 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 luck 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 powerful hardware needed (in case you have a faster processor than your opponents, you've got a better chance of finding the right number before they perform ), but also due to the large amounts of electricity that running these chips consumes. .

And, the number of bitcoins given as a reward for solving the puzzle will decrease. Its 12.5 now, however, it halves every four decades or so (the next one is expected in 2020-21). The worth of bitcoin relative to cost of electricity and hardware could extend up over the next few decades to partially compensate this reduction, but its not certain. .

The problem of this calculation (the required 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 programmers think is necessary for a steady and diminishing flow of new coins until the highest number of 21 million is reached (expected some time in 2140).

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