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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 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. However, bitcoin isnt physical, so why do we call it mining

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

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

Backtracking a bit, lets discuss nodes. A node is a powerful computer that runs the bitcoin software and helps to keep bitcoin running by participating in the relay of information. Anyone can run a node, you simply download the bitcoin software (free) and leave a certain port open (the downside 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 which it knows, that will relay the information to nodes that they know, etc.. This way it ends up getting around the entire network pretty fast. .

Some nodes are mining nodes (usually referred to as miners). These group outstanding transactions into blocks and add them to the blockchain. How do they do so by solving a intricate mathematical puzzle that is part 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 cube and passed through a hash function, produces a result that is within a certain range.

(For fiction fans, 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 which makes it impossible to forecast exactly what the outcome will be. So, miners suppose the mystery number and use the hash function to the combination of the guessed number and 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 make the intended 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 success to the rest of the network. All the other 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 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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Though its not nearly as cushy a deal as it sounds. There are a 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 ).

Additionally, the expenses of webpage being a mining node are considerable, not only due to the powerful hardware needed (if you have a faster processor than your opponents, you've got a better chance of finding the right number before they perform ), but also because of the large amounts of electricity that running these processors consumes. .

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

The difficulty resource of the calculation (the required number of zeroes at the beginning of the hash string) is adjusted frequently, so that it takes on average approximately 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 maximum number of 21 million is attained (anticipated some time in 2140).