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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 permit a performance of around 2 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 brought out into the light yet (like the golden hasnt been awakened ). 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 little, lets discuss nodes. A node is a powerful computer that runs the bitcoin applications and assists keep bitcoin running by participating in the relay of information. Anyone can run a node, you simply download the bitcoin software (totally 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 which it knows, who will relay the information to nodes that they know, etc.. This 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 into the blockchain. How can they do this By solving a complex mathematical puzzle that is a portion of the bitcoin program, and including the answer in the cube. The puzzle that needs solving is to find a number which, when combined with all the information in the block and passed through a hash function, produces a result that's within a certain range.

(For fiction fans, 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 do they find this number By guessing at random. The hash function makes it impossible to forecast exactly what the outcome will be. So, miners guess the puzzle number and apply the hash function to the combination of that guessed number and 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 desired result, or there might be none (in the event the miners keep trying, but using a different block configuration). .

The first miner to get 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 figure out the puzzle number for your next one. As a reward for its own work, the victorious miner has some new bitcoin. .

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

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

Additionally, the expenses of being a mining node are considerable, not only because of the powerful hardware needed (in case you have a faster processor than your competitors, you've got a better chance of finding the correct number before they perform ), but also due to 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 pits each four decades or so (the next one is expected in 2020-21). The worth of bitcoin relative to price of power and hardware could go up click here to read over the next few years to partially compensate this reduction, but its not certain. .

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

Why 10 minutes that's the amount of time the bitcoin developers think is necessary for a steady and diminishing flow of new coins until the maximum number of 21 million is reached (anticipated some time in 2140).