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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 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. However, bitcoin isnt physical, so why do we call it mining

Since its like gold mining in that 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 been dug up). The bitcoin protocol stipulates that 21 million bitcoins will exist at some point.

They get to perform 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 that 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 (free) and also leave a certain port open (the downside is that it consumes energy and storage space the network at time of writing takes up about 145GB).

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

Some nodes are mining nodes (usually referred to as miners). These group outstanding transactions into cubes and add them to the blockchain. How can they do this By solving a complex mathematical mystery that is a portion of the bitcoin app, 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 through a hash function, creates a result that is within a certain range.

(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.)

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How can they find this number By guessing at random. The hash function which makes it impossible to forecast exactly what the output will be. So, miners guess the mystery number and apply the hash function to the combination of the guessed number and also 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 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 rest of the network. All the other miners immediately stop work on that block and start trying to find out the puzzle number for the next one. As click this 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 will be worth almost $200,000.

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Though its not nearly as cushy a deal as it sounds. There are a lot of mining nodes competing for this benefit, and it is a question of luck and computing power (the further guessing calculations you can perform, the luckier you are).

Additionally, the costs of being a mining node are considerable, not only because of the powerful hardware needed (in case 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 all bitcoins given as a reward for solving the mystery will decrease. Its 12.5 now, but it halves every four decades or so (the next one is anticipated in 2020-21). The value of bitcoin relative to cost of power and hardware could go up over the next few decades to partially 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 corrected 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 to get a steady and diminishing flow of new coins until the maximum number of 21 million has been attained (expected some time in 2140).