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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 permit a performance of around two 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 out of the ground. However, bitcoin isnt physical, so why do we call it mining

Since its like gold mining in that the bitcoins exist in the protocols design (like the gold is underground), but they havent been brought out 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 so as a reward for creating blocks 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 just 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 that it knows, who will relay the information to nodes 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 group outstanding transactions into cubes and add them to the blockchain. How can they do so by solving a complex mathematical mystery that's part of this 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 block and passed via a hash function, produces a result that's within a certain range.

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(For trivia lovers, this number is known as 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.)

How do they find this number By guessing at random. directory The hash function makes it impossible to predict exactly what the output will be. So, miners guess the puzzle number and use the hash function to the combination of the guessed number and also the information in the cube. The resulting hash has to start 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 with 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 block and start trying to find out the mystery number for your next one. As a reward for its own work, the victorious miner has some new bitcoin. .

In the time of writing, the payoff is 12.5 bitcoins, which in time of writing is worth almost $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 ).

Also, the costs of being a mining node are considerable, not only because of the powerful hardware needed (if you've got a faster processor than your opponents, you've got a better chance of finding the right number before they do), but also because of the large amounts of electricity that running these chips consumes. .

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

The problem of the 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's 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 (expected some time in 2140).

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