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Instead, they went with Solution 2. The resulting currency, known as bitcoin money, 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 bitcoin mining, you envisage coins being dug from the ground. However, bitcoin isnt physical, so why do we call it mining

Because 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 (like the golden hasnt 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 which runs the bitcoin applications and assists keep bitcoin running by participating in the relay of information. Anyone can run a node, you simply download the bitcoin software (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 which it knows, that will relay the information to nodes they know, etc.. This way it ends up getting around the entire network fairly quickly. .

Some nodes are mining nodes (usually known as miners). These set outstanding transactions into cubes and add them to the blockchain. How do they do this By solving a complex mathematical puzzle that is part of this bitcoin program, and including the answer in the block. The puzzle that needs solving is to find a number that, when combined with the information in the block and passed through a hash function, this page creates a result that is within a certain range.

(For fiction fans, this number is called a nonce, which is a concatenation of number used once. In the instance 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 predict what the output will be. So, miners guess the puzzle number and apply the hash function to the combination of that guessed number and also the data in the block. The resulting hash must begin with a pre-established number of zeroes.

Whats more, there may 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). site here .

The first miner to acquire a resulting hash within the desired range announces its victory to the rest of the network. The rest of the miners immediately stop work on that block and begin trying to figure out the puzzle number for the next one. As a reward for the 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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Though its not nearly as cushy a deal as it sounds. There are a lot of mining nodes competing for that benefit, and it is a question of fortune and computing power (the further guessing calculations you can execute, the luckier you are).

Additionally, the expenses of being a mining node are considerable, not only due to the effective hardware needed (if you have a faster processor than your competitors, you've got a better chance of finding the right number before they perform ), but also due to the large amounts of electricity that running these processors consumes. .

And, the number of bitcoins awarded as a reward for solving the puzzle will decrease. Its 12.5 now, however, it pits each four decades or so (the next one is anticipated in 2020-21). The worth of bitcoin relative to price of power and hardware could extend up during the next few years to partially 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 adjusted frequently, so it takes on average about 10 minutes to process a block.

Why 10 minutes That is the amount of my review here time that the bitcoin developers think is necessary for a steady and diminishing flow of new coins until the maximum number of 21 million is reached (anticipated some time in 2140).