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Insteadthey 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 out of the ground. But bitcoin isnt bodily, so why do we call it mining

Since its similar to gold mining in that the bitcoins exist in the protocols design (just as the gold exists underground), but they havent been brought out into the mild yet (like the golden hasnt yet 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 blocks 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 keep bitcoin running by participating in the relay of information. Anyone can run a node, you just download the bitcoin software (free) and leave a certain port open (the drawback is the fact 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.. This way it ends up getting around the whole network fairly fast. .

Some nodes are mining nodes (usually known as miners). These set outstanding transactions into cubes and add them into the blockchain. How do they do this By solving a complex mathematical puzzle that is part of this bitcoin program, and including the answer in the cube. The mystery that needs solving is to find a number which, when combined with the information in the block and passed through a hash function, creates a result that's within a certain range.

(For fiction fans, this number is known as a nonce, which is a concatenation of number used once. In the instance 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 use the hash function to the combination of the guessed number and also the data in the block. The resulting hash must begin with a pre-established number of zeroes.

Whats more, there might be several nonces that produce the desired result, or there might be none (in the event the miners keep trying, but with a different block configuration). .

The first miner to acquire a resulting hash within the desirable range announces its victory to the rest of the network. All the other miners immediately cease work on that block and begin trying to find out the puzzle number for your next one. As a reward for the work, the victorious miner has some new bitcoin. .

At the time of writing, the reward is 12.5 bitcoins, which at time of writing will be worth nearly $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 reward, and it is a question of luck and computing power (the further guessing calculations you can execute, the luckier you are).

Also, the costs of being a mining node are considerable, not only because of 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 due to the large amounts of power that running these chips consumes. .

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

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

Why 10 minutes That is the amount of time the bitcoin programmers think is necessary to get a steady and diminishing flow of new coins until the maximum number of 21 million is reached (expected some time in 2140).