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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 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 about bitcoin mining, you envisage coins being dug from the ground. However, bitcoin isnt bodily, so why do we call it mining

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

They get to do so as a reward for creating cubes of confirmed 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 helps keep bitcoin running by participating in the relay of information. Anyone can run a node, you simply download the bitcoin applications (totally 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 which 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 known as miners). These group outstanding transactions into cubes and add them to the blockchain. How do they do so by solving a intricate mathematical mystery that's part of this bitcoin program, 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 cube and passed via a hash function, creates a result that is within a certain range.

 

 

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(For fiction fans, this number is called a nonce, which is a concatenation of number employed once. In the instance 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 which makes it impossible to predict what the outcome will be. So, linked here miners suppose the puzzle number and use the hash function to the combination of that guessed number and also 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 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 victory to the remainder 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 own work, the victorious miner gets some new bitcoin. .

At the time of writing, the reward 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 deal as it sounds. There are a whole lot of mining nodes competing for this reward, and it is a question of fortune and computing power (the further 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've got a faster processor than your competitors, you've got a better chance of finding the right number before they perform ), but also because of the large amounts of power that running these chips consumes. .

And, the number of all bitcoins given as a reward for solving the puzzle will decrease. Its 12.5 now, but it halves every four decades or so (the next one is anticipated in 2020-21). The value of bitcoin relative to price of power and hardware could go up over the next few years 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 that it takes on average approximately 10 minutes to process a block.

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

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