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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. At 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 out of the ground. However, bitcoin isnt physical, so why do we call it mining

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

They get to perform this as a reward for creating blocks of confirmed transactions and including them in the blockchain.

Backtracking a bit, lets discuss 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 software (totally free ) and leave a certain port open (the drawback 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 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 do they do this By solving a complex mathematical mystery that's part of the bitcoin app, and including the answer in the block. The mystery that needs solving is to find a number which, when combined with all 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 called 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 which makes it impossible to predict what the output will be. So, miners guess the mystery number and use the hash function to the combination of that guessed number and also the data in the block. The resulting hash has to start with a pre-established number of zeroes.

Whats more, there may be several nonces that make the desired result, or there may 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 start trying to figure 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 web link almost $200,000.

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

Also, the expenses of being a mining node are considerable, not only due to the powerful hardware needed (in case you have a faster processor than your opponents, you have a better chance of finding the correct number before they perform ), but also due to the large amounts of electricity that running these processors consumes. .

And, the number of all bitcoins given as a reward for Clicking Here solving the mystery will decrease. Its 12.5 now, but 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 decades to partly compensate this reduction, but its not certain. .

The problem of this calculation (the required number of zeroes at the beginning of the hash string) is adjusted frequently, so it requires on average about 10 minutes to process a block.

Why 10 minutes that's the amount of time the bitcoin developers think is necessary for a steady and diminishing flow of new coins until the highest number of 21 million is attained (anticipated some time in 2140).