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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 process to allow a performance of around 2 million transactions every day. In 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

Because its similar to gold mining in that the bitcoins exist in the protocols design (just as the gold is underground), but they havent been introduced into the mild yet (like the golden hasnt 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 cubes of confirmed transactions and including them in the blockchain.

Backtracking a little, lets discuss nodes. A node is a powerful computer that 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 (totally free ) and also leave a certain port open (the drawback 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.. That way it ends up getting around the whole 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 so by solving a intricate mathematical puzzle that is a portion of this bitcoin app, and including the answer in the cube. The puzzle that needs solving is to find a number that, when combined with the information in the cube and passed via a hash function, produces a result that is within a certain range.

(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.)

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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 guess the mystery number and apply the hash function to the combination of the guessed number and the information in the block. 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 might be none (in the event 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. 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 work, the victorious miner gets some new bitcoin. .

At the time of writing, the reward is 12.5 click for more info bitcoins, which in time of writing will be 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 fortune and computing power (the more guessing calculations you can execute, the luckier you are).

Additionally, the costs of being a mining node are considerable, not only because of the effective 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 do), but also because of the large amounts of electricity 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 decades or so (the next one is expected in 2020-21). The worth of bitcoin relative to cost of power and hardware could go up during the next few years to partly 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 that it requires on average about 10 minutes to process a block.

Why 10 minutes that's the amount of time the her comment is here bitcoin programmers read more think is necessary to get a steady and diminishing flow of new coins until the highest number of 21 million is attained (expected some time in 2140).