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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 process to permit a performance of around 2 million transactions per 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

Since its like gold mining in that the bitcoins exist in the protocols design (like the gold is underground), but they havent been introduced into the mild yet (just as 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 little, lets talk about nodes. A node is a powerful computer which runs the bitcoin applications 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 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 whole network fairly quickly. .

Some nodes are mining nodes (usually known as miners). These group outstanding transactions into cubes and add them to the blockchain. How do they do this By solving a intricate mathematical mystery that is a portion 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 all the information in the block and passed via a hash function, produces a result that is within a certain range.

(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.)

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How do they find this number By guessing at random. The hash function makes it impossible to predict what the outcome will be. So, miners suppose the mystery number and apply the hash function to the combination of that 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 produce 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 desired range announces its victory to the rest of the network. All the other miners immediately cease work on that block and start trying to find 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 payoff is 12.5 bitcoins, which in time of writing is worth nearly $200,000.

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Though its not nearly as cushy a deal as it sounds. There are a whole lot of mining nodes competing for that reward, and it is a question of fortune and computing power (the more guessing calculations you can execute, the luckier you are).

Also, the costs of being a mining node are considerable, not only because of the effective hardware needed (in case you have 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 bitcoins given as a reward for solving the mystery will decrease. Its 12.5 now, but it halves every four decades or so (the next one is expected in 2020-21). The worth of bitcoin relative to cost of electricity and hardware could extend up over the next few decades to partially compensate this reduction, but its Get the facts not certain. .

The problem of this 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 programmers think is necessary to get a continuous and diminishing flow of new coins until the highest number of 21 million has been attained (expected some time in 2140).