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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 from the ground. But bitcoin isnt physical, 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 introduced into the light yet (like the gold hasnt yet 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 blocks of validated transactions and including them in the blockchain.

Backtracking a bit, lets discuss nodes. A node is a powerful computer which runs the bitcoin software and helps to keep bitcoin running by participating in the relay of information. Anyone can run a node, you simply download the bitcoin software (free) and also leave a certain port open (the downside is 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 that they know, etc.. This way it ends up getting around the whole network fairly quickly. .

Some nodes are mining nodes (usually referred to as miners). These set outstanding transactions into cubes and add them into the blockchain. How can they do this By solving a intricate mathematical puzzle that is part of this bitcoin app, and including the answer in the block. The mystery that needs solving is to find a number that, when combined with the information in the block and passed via a hash function, produces a result that's within a certain range.

(For trivia lovers, this number is known as a nonce, which is a concatenation of number employed 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 makes it impossible to forecast exactly what the outcome will be. So, miners suppose the mystery number and apply the hash function to the combination of the 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 desired visit this site right here result, or there may 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 success to the rest of the network. All the other miners immediately cease work on that block and begin trying to figure out the mystery number for the next one. As a reward for its own work, the victorious miner has some new bitcoin. .

In 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 lot of mining nodes competing for that benefit, and it's a question you can try here of luck 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 competitors, you have a better chance of finding the correct number before they perform ), but also due to 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, but it pits 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 my latest blog post go up during the next few decades to partly compensate this reduction, but its not certain. .

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

Why 10 minutes that's the amount of time that the bitcoin programmers think is necessary for a continuous and diminishing flow of new coins until the maximum number of 21 million has been reached (expected some time in 2140).