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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. 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 the bitcoins exist in the protocols design (just as the gold exists underground), but they havent been introduced into the mild 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 do this as a reward for creating blocks of validated 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 simply download the bitcoin applications (free) and also 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 that they know, etc.. This way it ends up getting around the entire network pretty quickly. .

Some nodes are mining nodes (usually referred to as miners). These group outstanding transactions into blocks and add them to 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 block. The puzzle that needs solving is to find a number which, when combined with the information in the cube and passed via a hash function, creates 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 employed once. In the instance 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 function which makes it impossible to forecast 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 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 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 desirable range announces its success to the rest of the network. All the other miners immediately stop work on that block and begin trying to find out the puzzle number for your next one. As a reward for the own work, the victorious miner gets some new bitcoin. .

At the time of writing, the reward is 12.5 bitcoins, which in time of writing is worth nearly $200,000.

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Although its not nearly as cushy a bargain as it sounds. There are a lot of mining nodes competing for this reward, and it's a question of luck and computing power (the further guessing calculations you can perform, the luckier you're ).

Additionally, the expenses 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 correct number before they perform ), but also due to the large amounts of electricity that running these chips consumes. .

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

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

Why 10 minutes That is 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 has been attained (anticipated some time in 2140).

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