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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 process to permit a performance of around two million transactions every 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 bodily, so why do we call it mining

Because its like gold mining in that the bitcoins exist in the protocols design (just as the gold exists underground), but they havent been brought out into the mild yet (like the gold hasnt 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 validated transactions and including them in the blockchain.

Backtracking a little, lets discuss nodes. A node is a powerful computer which runs the bitcoin software and assists keep bitcoin running by participating in the relay of information. Anyone can run a node, you simply download the bitcoin software (totally free ) and leave a certain port open (the downside 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, who will relay the information to nodes they know, etc.. That way it ends up getting around the whole network fairly fast. .

Some nodes are mining nodes (usually known as miners). These group outstanding transactions into blocks and add them to the blockchain. How do they do this By solving a intricate mathematical puzzle that's a portion of this bitcoin program, and including the answer in the cube. The puzzle that needs solving is to find a number that, when combined with the data in the cube and passed via a hash function, produces a result that's within a certain range.

(For fiction fans, this number is called a nonce, which is 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 forecast what the output will be. So, miners guess the mystery number and use the hash function to the combination of the guessed number and the data in the block. The resulting hash must begin with a pre-established number of zeroes.

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

The first miner to acquire 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 figure out the mystery number for the next one. As a reward for the work, the victorious miner gets some new bitcoin. .

In the time of writing, the reward is 12.5 bitcoins, which in time get redirected here 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 benefit, 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 due to the effective 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 electricity that running these processors consumes. .

And, the number of bitcoins awarded as a reward for solving the puzzle will decrease. Its 12.5 now, but it halves every four years or so (the next one is expected in 2020-21). The value of bitcoin relative to price of electricity and hardware could go up over the next few decades 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 corrected frequently, so that it requires on average about 10 minutes to process a block.

Why 10 minutes that's the amount of time that the bitcoin programmers think is necessary to get a continuous and diminishing flow of new coins until the maximum number of 21 million is reached (anticipated some time in 2140).