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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 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 from the ground. But bitcoin isnt bodily, so why do we call it mining

Since 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 mild yet (like the gold hasnt yet been awakened ). The bitcoin protocol stipulates that 21 million bitcoins will exist at some point.

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

Backtracking a bit, lets discuss nodes. A node is a powerful computer that runs the bitcoin applications and assists to keep bitcoin running by participating in the relay of information. Anyone can run a node, you simply download the bitcoin applications (free) and 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 that it knows, that will relay the information to nodes that they know, etc.. This way it ends up getting around the entire network pretty fast. .

Some nodes are mining nodes (usually referred to as miners). These group outstanding transactions into cubes and add them into the blockchain. How do they do so by solving a complex mathematical puzzle that is a portion of the bitcoin app, and including the answer in the cube. 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, creates a result that is within a certain range.

(For trivia lovers, this number is known as a nonce, which is 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 makes it impossible to forecast what the output will be. So, miners suppose the puzzle number and use the hash function to the combination of that guessed number and also the data in the cube. The resulting hash must start with a pre-established number of zeroes.

Whats more, there might be several nonces that make the intended result, or there may 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 victory 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. .

In 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's a question of luck 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 (in case you have 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 chips consumes. .

And, the number of bitcoins given as a reward for solving the mystery will decrease. Its check these guys out 12.5 now, but it pits each four years or so (the next one is anticipated in 2020-21). The worth of bitcoin relative to cost of power and hardware could go up over the next few years to partially compensate this reduction, but its not certain. .

The problem 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 That is the amount of time that the bitcoin programmers think is necessary for a steady and diminishing flow of new coins until the maximum number of 21 million has been attained (expected some time in 2140).