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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 two million transactions per 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. 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 is underground), but they havent been brought out into the mild yet (like the gold 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 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 software and helps keep bitcoin running by participating in the relay of information. Anyone can run a node, you just download the bitcoin software (free) and leave a certain port open (the drawback is that it consumes energy and storage space the network at time of writing takes up about 145GB).

One node will send information to some nodes which it knows, that will relay the information to nodes they know, etc.. This 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 do they do this By solving a complex mathematical puzzle that is part of the bitcoin program, and including the answer in the cube. The mystery that needs solving is to find a number which, when combined with the data in the block and passed via a hash function, creates a result that's within a certain range.

(For fiction fans, this number is known as a nonce, which is a concatenation of number used 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 makes it impossible to forecast what the outcome will be. So, miners suppose the puzzle number and apply the hash function to the combination of the guessed number and also the information in the block. The resulting hash has to begin 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 which case the miners keep trying, but with a different block configuration). .

The first miner to get a resulting hash within the desirable range announces its success to the remainder of the network. All the other miners immediately cease work on that block and start 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 reward is 12.5 bitcoins, which in 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 benefit, and it's a question of fortune and computing power (the further guessing calculations you can perform, the this post luckier you are).

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

And, the number of bitcoins awarded 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 worth of bitcoin relative to price of electricity and hardware could extend up during the next few years to partly compensate this reduction, but 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 requires on average about 10 minutes to process a block.

Why 10 minutes That is the amount of time that the bitcoin developers think is directory necessary to get a steady and diminishing flow of new coins until the highest number of 21 million has been reached (anticipated some time in 2140).