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Insteadthey went with Solution 2. The resulting currency, known as bitcoin cash, increased the blocksize to 8 Mb in order to accelerate the verification process to permit 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 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 that the bitcoins exist in the protocols design (just as the gold is underground), but they havent been introduced into the mild yet (like the golden hasnt been dug up). 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 helps 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 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 cubes and add them into the blockchain. How can they do so by solving a complex mathematical mystery that's a portion of this bitcoin app, and including the answer in the cube. The puzzle that needs solving is to find a number that, when combined with the data in the block and passed via 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 used once. In the case of bitcoin, the nonce is an integer between 0 and 4,294,967,296.)

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How can they find this number By guessing at random. The hash function which makes it impossible to forecast what the outcome will be. So, miners guess the puzzle number and use the hash function to the combination of that guessed number and the information in the block. The resulting hash must begin with a pre-established number of zeroes.

Whats more, there may be several nonces that produce the intended 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 desired range announces its victory to the rest of the network. The rest of the miners immediately cease work on that block and begin trying to find out the puzzle number for the next one. As a reward for the own work, the victorious miner gets some new bitcoin. .

At the time of writing, the payoff is 12.5 bitcoins, which at 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 that benefit, and it is a question of fortune and computing power (the further guessing calculations you can perform, the luckier you're ).

Additionally, the costs of being a mining node are considerable, not only due to 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 before they perform ), but also because of the large amounts of power that running these chips consumes. .

And, the number of bitcoins given as a reward for solving the mystery will decrease. Its 12.5 now, however, it halves every four decades or so (the next one is expected in 2020-21). The worth of bitcoin relative to cost of electricity and hardware could extend up during the next few years 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 adjusted frequently, so it requires on average about 10 minutes to process a block.

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