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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 allow a performance of around 2 million transactions per day. At the time of writing, Bitcoin Cash is valued at $545.00 to Bitcoins $6,328.11.

When you hear bitcoin mining, you envisage coins being dug out of the ground. But bitcoin isnt physical, so why do we call it mining

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

They get to do this as a reward for creating cubes of validated transactions and including them in the blockchain.

Backtracking a little, lets discuss nodes. A node is a powerful computer which runs the bitcoin applications and assists to keep bitcoin running by participating in the relay of information. Anyone can run a node, you just download the bitcoin software (free) and also leave a certain port open (the downside is the fact 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, 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 set outstanding transactions into cubes and add them to the blockchain. How can they do so by solving a intricate mathematical puzzle that's a portion of the bitcoin program, and including the answer in the cube. The mystery that needs solving is to find a number that, when combined with the data in the cube and passed through a hash function, produces a result that's within a certain range.

 

 

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(For fiction fans, this number is called a nonce, which is a concatenation of number used once. In the case advice 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 forecast what the output will be. So, miners guess the puzzle number and apply the hash function to the combination of that guessed number and also the data in the block. The resulting hash has to begin with a pre-established number of zeroes.

Whats more, there may 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 get a resulting hash within the desired range announces its victory to the remainder of the network. All the other miners immediately stop work on that block and start trying to find out the puzzle 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 is 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 this benefit, and it's a question of fortune and computing power (the more guessing calculations you can perform, the luckier you are).

Also, the costs of being a mining node are considerable, not only because of the powerful hardware needed (if you've got a faster processor than your opponents, you've got a better chance of finding the correct number go before they do), but also because of the large amounts of power that running these chips consumes. .

And, the number of bitcoins awarded as a reward for solving the puzzle will decrease. Its 12.5 now, however, it pits redirected here 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 extend up during the next few decades to partially compensate this reduction, but its not certain. .

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

Why 10 minutes That is the amount of time the bitcoin developers think is necessary to get a steady and diminishing flow of new coins until the maximum number of 21 million has been reached (anticipated some time in 2140).

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