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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 two million transactions per day. At 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 like gold mining in the bitcoins exist in the protocols design (just as the gold exists underground), but they havent been brought out into the mild yet (just as the gold hasnt been dug up). The bitcoin protocol stipulates that 21 million bitcoins will exist at some point.

They get to do so 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 that runs the bitcoin software and assists to keep bitcoin running by participating in the relay of information. Anyone can run a node, you simply download the bitcoin applications (free) and leave a certain port open (the downside is that it consumes energy and storage space the network at time of writing carries 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 whole network fairly fast. .

Some nodes are mining nodes (usually referred to as miners). These group outstanding transactions into cubes and add them into the blockchain. How do they do this By solving a intricate mathematical puzzle that's a portion of the bitcoin program, and including the answer in the block. The mystery that needs solving is to find a number which, when combined with 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 can be a concatenation of number employed 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 output will be. So, miners guess the mystery number and apply the hash function to the combination of that 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 desired result, or there may 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 desired range announces its success to the rest of the network. All the other miners immediately stop work on that block and begin trying to figure out the mystery number for the next one. As a reward for the work, the victorious miner gets some new bitcoin. .

In the time of writing, the payoff is 12.5 bitcoins, which at 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 reward, and it is a question of luck and computing power (the further guessing calculations you can perform, the luckier you're ).

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

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

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

Why 10 minutes that's the amount of time that the bitcoin programmers think is necessary for a continuous and diminishing flow of new coins until the maximum number of 21 million has been reached (anticipated some time in 2140).

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