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Instead, they went with Solution 2. The resulting currency, known as bitcoin cash, increased the blocksize to 8 Mb in order to accelerate the verification procedure to permit 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. However, bitcoin isnt bodily, so why do we call it mining

Since its similar to gold mining in that the bitcoins exist in the protocols design (just as the gold exists underground), but they havent been introduced into the light 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 this as a reward for creating blocks of confirmed transactions and including them in the blockchain.

Backtracking a bit, lets discuss nodes. A node is a powerful computer that runs the bitcoin applications and helps 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 also leave a certain port open (the drawback is the fact 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, who will relay the information to nodes 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 blocks and add them to the blockchain. How can they do this By solving a complex mathematical puzzle that is part of this bitcoin program, and including the answer in the block. The puzzle that needs solving is to find a number which, when combined with all the information in the cube and passed through a blog hash function, creates a result that's within a certain range.

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(For trivia lovers, this number is known as a nonce, which can be a concatenation of number employed once. In the instance of bitcoin, the nonce is an integer between 0 and 4,294,967,296.)

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 guess the puzzle number and apply the hash function to the combination of that guessed number and the data in the cube. The resulting hash must start with a pre-established number of zeroes.

Whats more, there might be several nonces that produce the desired result, or there may be none (in the event 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 rest of the network. All the other miners immediately cease work on that block and start trying to find out the mystery number for the next one. As a reward for its work, the victorious miner go to the website has some new bitcoin. .

In the time of writing, the payoff is 12.5 bitcoins, which in time of writing will be 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 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 expenses of being a mining node are considerable, not only because of the powerful hardware needed (in case you've got a faster processor than your competitors, you've got a better chance of finding the right number before they perform ), 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 puzzle will decrease. Its 12.5 now, but it pits each four years or so (the next one is linked here anticipated in 2020-21). The worth of bitcoin relative to price of power and hardware could extend up over the next few years to partly compensate this reduction, but its not certain. .

The problem of the calculation (the required number of zeroes at the beginning of the hash string) is adjusted frequently, so it takes on average about 10 minutes to process a block.

Why 10 minutes That is the amount of time the bitcoin developers think is necessary to get a continuous and diminishing flow of new coins until the highest number of 21 million is attained (expected some time in 2140).

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