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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 permit a performance of around two million transactions per 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 bodily, so why do we call it mining

Since its like gold mining in that the bitcoins exist in the protocols design (like the gold is underground), but they havent been introduced into the mild yet (just as the gold hasnt yet been awakened ). The bitcoin protocol stipulates that 21 million bitcoins will exist at some point.

They get to perform so 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 applications and assists keep bitcoin running by participating in the relay of information. Anyone can run a node, you just download the bitcoin applications (totally 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 that it knows, who will relay the information to nodes that they know, etc.. This way it ends up getting around the entire network pretty quickly. .

Some nodes are mining nodes (usually referred to as miners). These group outstanding transactions into blocks and add them into the blockchain. How can they do this By solving a complex mathematical mystery that's part of this bitcoin app, and including the answer in the cube. 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, creates a result that's within a certain range.

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(For fiction fans, this number is called 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.)

How can 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 apply the hash function to the combination of the guessed number and the information in the cube. The resulting hash has to start with a pre-established number of zeroes.

Whats more, there might be several nonces that make the desired result, or there may be none (in which case the miners keep trying, but with a different block configuration). .

The first miner to get a resulting hash within the desired range announces its success to the rest of the network. The rest of the miners immediately cease work on that block and begin trying to find out the mystery number for your next one. As a reward for its work, the victorious miner gets some new bitcoin. . find

In the time of writing, the payoff 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 deal as it sounds. There are a lot of mining nodes competing for that reward, and it is a question of luck and computing power (the more guessing calculations you can perform, the luckier you are).

Additionally, the costs of being a mining node are considerable, not only because of the effective hardware needed (if you have a faster processor than your competitors, 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 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 years or so (the next one is expected in 2020-21). The worth of bitcoin relative to price of electricity and hardware could go up over the next few years to partly compensate this reduction, but its not certain. .

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

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