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Instead, they 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 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 physical, so why do we call it mining

Since 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 light 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 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 software and assists to keep bitcoin running by participating in the relay of information. Anyone can run a node, you simply download the bitcoin software (free) and also 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, that will relay the information to nodes they know, etc.. This way it ends up getting around the entire network pretty fast. .

Some nodes are mining nodes (usually referred to as miners). These set outstanding transactions into cubes and add them to the blockchain. How can they do so by solving a intricate mathematical puzzle that's part of the bitcoin program, and including the answer in the block. The puzzle that needs solving is to find a number that, when combined with the data in the block and passed through a hash function, produces a result that's 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 can they find this number By guessing at random. The hash function which makes it impossible to predict exactly what the output will be. So, miners suppose the mystery number and like this use the hash function to the combination of the guessed number and the data in the block. The resulting hash has to start with a pre-established number of zeroes.

Whats more, there may be several nonces that produce the intended result, or there might be none (in the event the miners keep trying, but with a different block configuration). .

The first miner to acquire a resulting hash within the desirable range announces its victory 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 visit the site 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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Though 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 fortune and computing power (the more guessing calculations you can perform, the luckier you're ).

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

And, the number of all bitcoins awarded 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 worth of the original source bitcoin relative to price of power 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 corrected frequently, so it requires on average approximately 10 minutes to process a block.

Why 10 minutes that's the amount of time the bitcoin developers think is necessary for a steady and diminishing flow of new coins until the maximum number of 21 million is reached (expected some time in 2140).