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Instead, they went with Solution 2. The resulting currency, known as 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. However, 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 exists underground), but they havent been brought out into the mild yet (just as the golden hasnt been awakened ). 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 confirmed 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 keep bitcoin running by participating in the relay of information. Anyone can run a node, you just download the bitcoin software (free) and 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 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 pretty fast. .

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

(For fiction fans, this number is known as a nonce, which is a concatenation of number used once. In the case of bitcoin, the More about the author 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 predict what the output will be. So, miners guess the mystery number and apply the hash function to the combination of the 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 produce the intended result, or there might be none (in which case the miners keep trying, but with a different block configuration). .

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

At the time of writing, the payoff is 12.5 bitcoins, which in time of writing will be worth almost $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 this reward, and it is a question of fortune and computing power (the further guessing calculations you can execute, the luckier you are).

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Also, 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 competitors, you've got a better chance of finding the correct number before they do), but also due to the large amounts of electricity that running these processors consumes. .

And, the number of all bitcoins awarded 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 anticipated in 2020-21). The value of bitcoin relative to cost of power and hardware could go up over the next few decades to partly 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 corrected frequently, so it takes on average approximately 10 minutes to process a block.

Why 10 minutes That is site web the amount of time that the bitcoin programmers think is necessary to get a continuous and diminishing flow of new coins until the maximum number of 21 million is attained (anticipated some time in 2140).

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