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Instead, they went with Solution 2. The resulting currency, known as bitcoin cash, increased the blocksize to 8 Mb in order to accelerate the verification procedure to allow 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. But bitcoin isnt bodily, so why do we call it mining

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

They get to perform this as a reward for creating cubes 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 software and assists keep bitcoin running by participating in the relay of information. Anyone can run a node, you just download the bitcoin applications (free) and also 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, that will relay the information to nodes they know, etc.. That way it ends up getting around the entire network fairly quickly. .

Some nodes are mining nodes (usually referred to as miners). These set outstanding transactions into blocks and add them to the blockchain. How can they do this By solving a intricate mathematical mystery that is a portion of this bitcoin program, and including the answer in the block. The mystery that needs solving is to find a number which, when combined with the data in the block and passed through a hash function, creates a result that is within a certain range.

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

Whats more, there might be several nonces that make the desired my latest blog post 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 desired 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 figure out the mystery number for your next one. As a reward for its work, the victorious miner has some new bitcoin. .

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

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

Also, the expenses of being a mining node are considerable, not only due to the effective hardware needed (if you have a faster processor than your competitors, you've got 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 awarded as a reward for solving the puzzle will decrease. Its 12.5 now, but it pits each four decades or so (the next one is expected in 2020-21). The value of bitcoin relative to cost of electricity and hardware could go up during the next few decades to partially compensate this reduction, but its not certain. .

The difficulty of this calculation (the required number of zeroes at the beginning of the hash string) is corrected frequently, so that it requires on average approximately 10 minutes to process a block.

Why 10 minutes That is the amount of time that browse this site the bitcoin programmers think is necessary for a steady and diminishing flow of new coins until the highest number of 21 million has been reached (expected some time in 2140).