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

Because its like gold mining in the bitcoins exist in the protocols design (just as the gold exists 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 blocks 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 applications and helps to keep bitcoin running by participating in the relay of information. Anyone can run a node, you just download the bitcoin applications (totally free ) and leave a certain port open (the drawback is that it consumes energy and storage space the network at time of writing takes up about 145GB).

One node will send information to a few nodes which it knows, who will relay the information to nodes they know, etc.. This way it ends up getting around the entire network fairly fast. .

Some nodes are mining nodes (usually referred to as miners). These group outstanding transactions into blocks and add them to the blockchain. How do they do this By solving a complex mathematical puzzle that's part of the bitcoin program, and including the answer in the block. The mystery 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 is within a certain range.

(For trivia lovers, this number is known as a nonce, which can be a concatenation of number used 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 which 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 also the data in the cube. The resulting hash has to begin with a pre-established number of zeroes.

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

The first miner to get a resulting hash within the desirable 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 the next one. As a reward for the 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 will be worth almost $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 this benefit, and it is a question of luck and computing power (the further guessing calculations you can execute, the luckier you are).

Also, the costs of being a mining node are considerable, not only because of the effective hardware needed (in case you've got a faster processor than your opponents, you've got 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 awarded as a reward for solving the puzzle will decrease. Its 12.5 now, however, it pits each four decades or so (the next one is anticipated in 2020-21). The worth of bitcoin relative to price of electricity and hardware could go up during the next few years to partly compensate this reduction, but its not certain. .

The problem of look these up this calculation (the necessary number of zeroes at the beginning of the hash string) is adjusted frequently, so it requires on average approximately 10 minutes to process a block.

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