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Insteadthey 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 permit a performance of around 2 million transactions every 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 from the ground. However, bitcoin isnt bodily, so why do we call it mining

Because its like gold mining in the bitcoins exist in the protocols design (just as the gold exists underground), but they havent been introduced into the mild yet (like the gold hasnt yet been awakened ). 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 that runs the bitcoin software and helps keep bitcoin running by participating in the relay of information. Anyone can run a node, you just download the bitcoin applications (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, 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 to the blockchain. How do they do so by solving a complex mathematical puzzle that's part of this bitcoin app, and including the answer in the cube. The puzzle that needs solving is to find a number which, when combined with all the data in the block and passed via a hash function, creates a result that is within a certain range.

(For fiction fans, this number is called a nonce, which is a concatenation of number employed 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 forecast exactly what the output will be. So, miners guess the puzzle number and use the hash function to the combination of that guessed number and also the information in the cube. The resulting hash has to start 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 which case 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 start trying to find out the puzzle number for your next one. As a reward for the own work, the victorious miner has some new bitcoin. .

At the time of writing, the reward is click resources 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 lot of mining nodes competing for this reward, and it is a question of luck and computing power (the more guessing calculations you can perform, the luckier you're ).

Additionally, 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 competitors, that site you have a better chance of finding the correct number before they perform ), but also due to the large amounts of power that running these chips consumes. .

And, the number of all bitcoins given as a reward for solving the mystery will decrease. Its 12.5 now, but it pits each four years 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 additional hints its not certain. .

The difficulty 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 is the amount of time the bitcoin developers think is necessary to get a continuous and diminishing flow of new coins until the highest number of 21 million has been reached (expected some time in 2140).