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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 2 million transactions every 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 out of the ground. But bitcoin isnt bodily, so why do we call it mining

Because its similar to gold mining in that the bitcoins exist in the protocols design (just as the gold is underground), but they havent been brought out into the light yet (just as the gold hasnt yet been awakened ). The bitcoin protocol stipulates that 21 million bitcoins will exist at some point.

They get to do 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 assists to keep bitcoin running by participating in the relay of information. Anyone can run a node, you simply download the bitcoin applications (totally free ) and also leave a certain port open (the downside is the fact that it consumes energy and storage space the network at time of writing takes up about 145GB).

One node will send information to a few nodes that it knows, that will relay the information to nodes that they know, etc.. This way it ends up getting around the entire network fairly fast. .

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

(For trivia lovers, this number is known as a nonce, which can be 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 do they find this number By guessing at random. The hash function makes it impossible to predict what the output will be. So, miners guess the puzzle number and use the hash function to the combination of that guessed number and also the data in the cube. The resulting hash has to begin with a pre-established number of zeroes.

Whats more, there may be several nonces that make the desired result, or there might be none (in which case the miners keep trying, but using 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. The rest of the miners immediately stop work on that block and begin trying to find out the puzzle number for your next one. As a reward for its own 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 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've got a faster processor than your competitors, you have a better chance of finding the right number before they perform ), but also because of the large amounts of electricity that running these chips consumes. .

And, the number of bitcoins awarded as a reward for solving the puzzle will decrease. Its 12.5 now, these details however, it pits each four decades or so (the next one is expected in 2020-21). The worth of bitcoin relative to price of electricity and hardware could go up over the next few years to partly compensate this reduction, but its not certain. .

The difficulty of this calculation (the necessary 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's the amount of time that the bitcoin programmers think is necessary for a steady and diminishing flow of new coins until the maximum number of 21 million is attained (expected some time in 2140).