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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 procedure to permit a performance of around 2 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. 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 exists underground), but they havent been introduced into the mild yet (just as the golden hasnt been awakened ). 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 validated transactions and including them in the blockchain.

Backtracking a little, lets talk about nodes. A node is a powerful computer that runs the bitcoin software and assists 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 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 which it knows, who will relay the information to nodes they know, etc.. That way it ends up getting around the entire network fairly quickly. .

Some nodes are mining nodes (usually referred to as miners). These group outstanding transactions into blocks and add them to the blockchain. How do they do this By solving a intricate 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 which, when combined with all the data in the block and passed through a hash function, creates a result that's 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 case 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 forecast 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 intended result, or there might be none (in the event the miners keep trying, but using 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. All the other miners immediately cease work on that block and begin trying to figure out the mystery number for the next one. As a reward for the own work, the victorious miner has some new bitcoin. .

In the time of writing, the reward is 12.5 bitcoins, which in time of writing is worth nearly $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 more guessing calculations you can execute, the luckier you're ).

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

And, top article the number of all bitcoins given as a reward for solving the mystery will decrease. Its 12.5 now, but it halves every four years or so (the next one is expected 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. . view it

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

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