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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 about 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 (like the gold exists underground), but they havent been introduced into the light yet (like the golden hasnt yet been awakened ). 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 bit, lets talk about 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 just download the bitcoin applications (free) and also leave a certain port open (the drawback 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 that it knows, that will relay the information to nodes that they know, etc.. That way it ends up getting around the entire network fairly quickly. .

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

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(For trivia lovers, this number is known as a nonce, which can be a concatenation of number used once. In visit our website the instance of bitcoin, the nonce is an integer between 0 and 4,294,967,296.)

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 suppose the puzzle number and use the hash function to the combination of the guessed number and also the data in the cube. The resulting hash must begin with a pre-established number of zeroes.

Whats more, there might be several nonces that produce the intended result, or there may get more 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 success to the rest of the network. All the other miners immediately stop work on that block and begin trying to find out the puzzle number for the next one. As a reward for its work, the victorious miner has some new bitcoin. .

At the time of writing, the reward is 12.5 bitcoins, which at time of writing will be worth nearly $200,000.

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Although its not nearly as cushy a bargain as it sounds. There are a whole lot of mining nodes competing for this reward, and it's a question of luck and computing power (the more guessing calculations you can execute, the luckier you are).

Additionally, the costs of being a mining node are considerable, not only because of the powerful hardware needed (if you have a faster processor than your competitors, you've got a better chance of finding the right number before they do), 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 puzzle will decrease. Its 12.5 now, but it halves every four years or so (the next one is anticipated in 2020-21). The value of bitcoin relative to price why not check here 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 that it takes 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 for a continuous and diminishing flow of new coins until the highest number of 21 million has been attained (anticipated some time in 2140).

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