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

Because its similar to gold mining in the bitcoins exist in the protocols design (like the gold is underground), but they havent been introduced into the light yet (just as the gold hasnt yet been dug up). The bitcoin protocol stipulates that 21 million bitcoins will exist at some point.

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

Backtracking a bit, lets talk about nodes. A node is a powerful computer that runs the bitcoin applications and helps 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 downside is 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 they know, etc.. That way it ends up getting around the entire network fairly fast. .

Some nodes are mining nodes (usually known as miners). These set outstanding transactions into cubes and add them into the blockchain. How can they do so by solving a intricate mathematical puzzle that is part of this bitcoin app, and including the answer in the block. The mystery that needs solving is to find a number that, when combined with all the information in the block and passed through a hash function, produces a result that is within a certain range.

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(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.)

How can they find this number By guessing at random. The hash function which makes it impossible to forecast exactly what the output will be. So, miners guess the puzzle number and apply the hash function to the combination of the guessed number and the information in the block. The resulting hash must begin with a pre-established number of zeroes.

Whats more, there might be several nonces that produce the intended result, or there may 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 remainder of the network. The rest of the miners immediately cease work on that block and begin trying to find out the puzzle number for the next one. As a reward for the own work, the victorious miner gets some new bitcoin. .

At the time of writing, the reward is 12.5 bitcoins, which in time of writing will be worth nearly $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 this reward, and it's a question of fortune 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 because of the effective hardware needed (in case you've got a faster processor than your opponents, you've got a better chance of finding the correct number before they perform ), but also because of the large amounts of electricity 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, however, it halves every four years or so (the next one is anticipated in 2020-21). The value of bitcoin relative to price of electricity and hardware could go up during the next few years to partly compensate this reduction, but its not go to this website certain. .

The difficulty of this calculation (the necessary 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 to get a continuous and diminishing flow of new coins until the maximum number of 21 million has been reached (expected some time in 2140).

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