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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 process 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 about bitcoin mining, you envisage coins being dug out of the ground. But bitcoin isnt physical, so why do we call it mining

Since its similar to gold mining in the bitcoins exist in the protocols design (like the gold is underground), but they havent been brought out into the light yet (just as the golden hasnt been dug up). 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 little, lets discuss nodes. A node is a powerful computer that runs the bitcoin software and helps keep bitcoin running by participating in the relay of information. Anyone can run a node, you just download the bitcoin applications (free) and leave a certain port open (the drawback is the fact 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, who will relay the information to nodes they know, etc.. This way it ends up getting around the whole network pretty quickly. .

Some nodes are mining nodes (usually known as miners). These set outstanding transactions into cubes and add them into the blockchain. How can they do this By solving a complex mathematical mystery that is part of this bitcoin program, and including the answer in the cube. The mystery that needs solving is to find a number which, when combined with the data 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 can be a concatenation of number employed once. In the instance of bitcoin, the nonce is Discover More 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 use the hash function to the combination of the guessed number and also the information in the block. 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 acquire a resulting hash within the desirable range announces its victory to the rest of the network. All the other 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 has some new bitcoin. . Source

At the time of writing, the payoff is 12.5 bitcoins, which at 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 benefit, and it is a question of luck and computing power (the further guessing calculations you can perform, the luckier you are).

Also, the costs of being a mining node are considerable, not only due to the effective hardware needed (in case you've got a faster processor than your opponents, you've got a better chance of finding the correct number before they do), important link but also due to the large amounts of electricity that running these processors consumes. .

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

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

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