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Insteadthey went with Solution 2. The resulting currency, known as bitcoin cash, increased the blocksize to 8 Mb in order to accelerate the verification process to permit 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 about bitcoin mining, you envisage coins being dug from the ground. But bitcoin isnt bodily, 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 introduced into the mild yet (just as the golden hasnt yet been awakened ). The bitcoin protocol stipulates that 21 million bitcoins will exist at some point.

They get to do this as a reward for creating cubes of confirmed transactions and including them in the blockchain.

Backtracking a little, lets discuss nodes. A node is a powerful computer that runs the bitcoin applications and assists 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 downside 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 that it knows, who will relay the information to nodes that they know, etc.. This 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 complex mathematical mystery that's part of this 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 block and passed via a hash function, produces a result that's within a certain range.

(For trivia lovers, this number is called a nonce, which is a concatenation of number used once. In the instance 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 forecast what the outcome will be. So, miners guess the puzzle number and apply the hash function to the combination of the guessed number and the information in the cube. The resulting hash must begin with a pre-established number of zeroes.

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

The first miner to get a resulting hash within read the desirable range announces its victory to the rest of the network. All the other miners immediately stop work on that block and begin trying to figure out the mystery number for your next one. As a reward for its work, the victorious miner gets some new bitcoin. .

At the time of writing, the payoff is 12.5 bitcoins, which in time of writing is worth almost $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 benefit, and it is a question of luck and computing power (the more guessing calculations you can execute, 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 opponents, 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, helpful hints the number of 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 expected in 2020-21). The value of bitcoin relative to cost of electricity and hardware could extend up during the next few decades to partially compensate this reduction, but its not certain. .

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

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