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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 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. But bitcoin isnt bodily, so why do we call it mining

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

They get to perform this 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 which runs the bitcoin applications and assists to 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 takes up about 145GB).

One node will send information to a few nodes that it knows, that will relay the information to nodes that they know, etc.. This way it ends up getting around the whole network pretty fast. .

Some nodes are mining nodes (usually referred to as miners). These group outstanding transactions into cubes and add them into the blockchain. How do they do so by solving a complex mathematical puzzle that is a portion of the bitcoin program, and including the answer in the cube. The puzzle that needs solving is to find a number which, when combined with all the information in the block and passed through 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 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 which More Help makes it impossible to predict what the output will be. So, miners suppose the mystery number and apply the hash function to the combination of the guessed number and also the data in the block. The resulting hash must start with a pre-established number of zeroes.

Whats more, there might be several nonces that make the intended result, or there may 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 desirable range announces its victory to the remainder of the network. All the other miners immediately cease work on that block and start trying to figure out the puzzle number for the next one. As a reward for its work, the victorious miner gets some new bitcoin. .

In the time of writing, the reward is 12.5 bitcoins, which in time of writing is worth nearly $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 this reward, and it's a question of fortune and computing power (the more guessing calculations you can perform, the luckier you're ).

Also, the costs 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 right number before they do), but also because of the large amounts of power that running these chips consumes. .

And, the number of bitcoins awarded as a reward for solving the mystery will decrease. Its 12.5 now, however, it pits each four decades 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 decades to partially compensate this reduction, but its not certain. .

The problem of this calculation (the necessary 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's the amount of time that the bitcoin programmers think is necessary for a steady and diminishing flow of new coins until the maximum number of 21 million has been reached (anticipated some time in 2140).