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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 process to allow a performance of around 2 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 out of 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 is 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 validated transactions and including them in the blockchain.

Backtracking a bit, lets talk about nodes. A node is a powerful computer which runs the bitcoin applications and assists to keep bitcoin running by participating in the relay of information. Anyone can run a node, you just download the bitcoin applications (totally free ) and also leave a certain port open (the drawback is 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 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 set outstanding transactions into cubes and add them into the blockchain. How can they do this By solving a complex mathematical mystery that's a portion 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 cube and passed via a hash function, creates a result that's within a certain range.

(For trivia lovers, this number is called a nonce, which is 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 can they find this number By guessing at random. The hash function makes it impossible to predict exactly what the output will be. So, miners suppose the mystery number and apply the hash function to the combination of the guessed number and also the data in the block. The resulting hash must start with a pre-established number of zeroes.

Whats more, there may be several nonces that make the intended result, or there might be none (in the event 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 remainder of the network. The rest of the miners immediately cease work on that block Full Report and start trying to figure out the mystery number for your next one. As a reward for the own work, the victorious miner has some new bitcoin. .

In the time of writing, the reward is 12.5 bitcoins, which at time of writing is worth almost $200,000.

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Although its not nearly as cushy a bargain as it sounds. There are a lot of mining nodes competing for this reward, and it's a question of luck and computing power (the further guessing calculations you can execute, the luckier you are).

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 competitors, you have a better chance of finding the correct number before they do), but also because of the large amounts of electricity that running these processors consumes. .

And, the number of bitcoins given as a reward for solving the mystery will decrease. Its 12.5 now, but it halves every four years or so (the next one is expected in 2020-21). The worth of bitcoin relative to price of electricity and hardware could extend up during 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 adjusted frequently, from this source 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 developers think is necessary for a steady and diminishing flow of new coins until the highest number of 21 million is view website attained (anticipated some time in 2140).