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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 permit a performance of around two 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 physical, so why do we call it mining

Because its similar to gold mining in the bitcoins exist in the protocols design (like the gold exists underground), but they havent been brought out 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 perform 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 which runs the bitcoin software and helps to keep bitcoin running by participating in the relay of information. Anyone can run a node, you just download the bitcoin applications (free) and 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 some nodes which it knows, that will relay the information to nodes that they know, etc.. That way it ends up getting around the whole network pretty quickly. .

Some nodes are mining nodes (usually referred to as miners). These set outstanding transactions into blocks and add them into the blockchain. How do they do so by solving a intricate mathematical mystery 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 all the information in the cube and passed via a hash function, creates a result that is within a certain range.

(For trivia lovers, this number is called 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.)

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

Whats more, there may be several nonces that produce the desired result, or there might be none (in the event 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 rest of the network. The rest of the miners immediately cease work on that block and start trying to figure out the puzzle number for your next one. As a reward for the work, the victorious miner gets some new bitcoin. .

In the time of writing, the payoff is 12.5 bitcoins, which at 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 whole lot of mining nodes competing for that reward, and it is a question of fortune and computing power (the further guessing calculations you can perform, the luckier you are).

Also, the expenses of being a mining node are considerable, not only because of the effective hardware needed (if you have a faster processor than your opponents, 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 processors consumes. .

And, the number of all bitcoins given as a reward for solving the mystery will decrease. Its 12.5 now, but it pits each four decades or so (the next one is expected in 2020-21). The worth of bitcoin relative to price of electricity her response and hardware could extend up over the next few decades to partly 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 that it takes on average approximately 10 minutes to process a block.

Why 10 minutes That is the amount of time the bitcoin programmers think is necessary for a steady and diminishing flow of new coins until the highest number of 21 million has been attained (expected some time in 2140).