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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 allow a performance of around two million transactions every 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 from the ground. But bitcoin isnt bodily, so why do we call it mining

Since its similar to gold mining in the bitcoins exist in the protocols design (like the gold exists underground), but they havent been brought out into the light yet (just as 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 validated transactions and including them in the blockchain.

Backtracking a little, lets discuss nodes. A node is a powerful computer which runs the bitcoin software and assists keep bitcoin running by participating in the relay of information. Anyone can run a node, you just download the bitcoin software (totally 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 carries up about 145GB).

One node will send information to a few nodes which it knows, that 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 group outstanding transactions into cubes and add them into the blockchain. How can they do this By solving a complex mathematical mystery that is a portion of the bitcoin app, and including the answer in the block. The puzzle that needs solving is to find a number that, when combined with the information in the block and passed through a hash function, produces a result that's within a certain range.

(For fiction fans, this number is called a nonce, which can be 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 Continued find this number By guessing at random. The hash function makes it impossible to forecast exactly what the outcome will be. So, miners suppose the puzzle number and apply the hash function to the combination of that guessed number and the information in the cube. The resulting hash must start with a pre-established number of zeroes.

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

The first miner to get a resulting hash within the desired range announces its victory to the remainder of the network. The rest of the miners immediately stop work on that block and begin trying to find out the mystery number for your next one. As a reward for the work, the victorious miner has some new bitcoin. .

In the time of writing, the payoff is 12.5 bitcoins, which in time of writing will be worth 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 luck and computing power (the more 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 bitcoins awarded as a reward for solving the puzzle will decrease. Its 12.5 now, however, it pits each four decades or so (the next one is expected in 2020-21). The value of bitcoin relative to cost of power and hardware could extend up over the next few years 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 it takes on average about 10 minutes to process a block.

Why 10 minutes that's the amount of time 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).