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

Because 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 been dug up). 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 validated transactions and including them in the blockchain.

Backtracking a little, 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 (free) and 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 whole network fairly fast. .

Some nodes are mining nodes (usually known as miners). These group outstanding transactions into blocks and add them to the blockchain. How can they do so by solving a intricate mathematical mystery that's part of this bitcoin program, and including the answer in the block. The mystery that needs solving is to find a number that, when combined with all the data in the block and passed via a hash function, creates 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 which makes it impossible to predict what the output will be. So, miners guess the puzzle number and link use the hash function to the combination of the guessed number and also the data in the cube. The resulting hash has to start with a pre-established number of zeroes.

Whats more, there might be several nonces that make the intended result, or there may be none (in which case the miners keep trying, but using a different block configuration). .

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

In the time of writing, the payoff is 12.5 bitcoins, which at time of writing will be worth nearly $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 that reward, and it is a question of luck and computing power (the further guessing calculations you can perform, the luckier you are).

Also, the costs of being a mining node are considerable, not only due to the effective hardware needed (if you have a faster processor than your opponents, 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, however, it pits each 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 during the next few years to partly compensate this reduction, but its not certain. .

The problem of the calculation (the necessary 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 the bitcoin programmers think is necessary to get a steady and diminishing flow of new coins until the highest number of 21 million has been reached (anticipated some time in 2140).

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