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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 every 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. But bitcoin isnt bodily, so why do we call it mining

Since its like gold mining in the bitcoins exist in the protocols design (just as the gold is underground), but they havent been introduced into the mild 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 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 software (totally free ) and also 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, who will relay the information to nodes that 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 into the blockchain. How do they do this By solving a intricate mathematical mystery that's part of the bitcoin app, and including the answer in the cube. The puzzle that needs solving is to find a number which, when combined with the data in the block and passed via a hash function, produces a result that's within a certain range.

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(For fiction fans, this number is known as 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.)

How can they find this number By guessing at random. The hash function makes it impossible to forecast exactly 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 cube. The resulting hash has to 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 the event the miners keep trying, but using a different block configuration). .

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

In the time of writing, the reward is 12.5 bitcoins, which in time of writing will be worth nearly $200,000.

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Although its not nearly as cushy over here 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 more guessing calculations you can execute, the luckier you are).

Additionally, the costs of being a special info mining node are considerable, not only due to the powerful hardware needed (if you've got a faster processor than your competitors, you've got a better chance of finding the correct number before they do), but also due to the large amounts of electricity that running these chips consumes. .

And, the number of all 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 anticipated in 2020-21). The value of bitcoin relative to cost of power and hardware could extend up over the next few years 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 it requires on average about 10 minutes to process a block.

Why 10 minutes That is the amount of time the bitcoin developers think is necessary to get a continuous and diminishing flow of new coins until the highest number of 21 million is reached (expected some time in 2140).

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