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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. In 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

Since its like gold mining in that the bitcoins exist in the protocols design (like the gold is underground), but they havent been brought out into the mild 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 do so as a reward for creating blocks of confirmed transactions and including them in the blockchain.

Backtracking a bit, lets discuss nodes. A node is a powerful computer that runs the bitcoin software and assists to keep bitcoin running by participating in the relay of information. Anyone can run a node, you just 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 takes up about 145GB).

One node will send information to a few nodes which it knows, who will relay the information to nodes they know, etc.. That way it ends up getting around the entire network fairly fast. .

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

(For trivia lovers, 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.)

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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 suppose 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 produce the intended result, or there may be none (in the event 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. The rest of the miners immediately stop work on that block and start trying to find out the mystery number for your next one. As a reward for its work, the victorious visit the site miner gets some new bitcoin. .

In the time of writing, the payoff is 12.5 bitcoins, which in time of writing is worth almost $200,000.

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Though its not nearly as cushy a deal as it sounds. There are a whole lot of mining nodes competing for that reward, and it's a question of luck and computing power (the further guessing calculations you can perform, the luckier you're ).

Also, the costs of being a mining node are considerable, not only due to the powerful hardware needed (in case you've got a faster processor than your competitors, you've got a better chance of finding the right number before they do), but also due to the large amounts of electricity 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 pits each four years or so (the next one is expected in 2020-21). The worth of bitcoin relative to cost of power and hardware could extend up during the next few decades to partly 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 requires on average approximately 10 minutes to process a block.

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