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Insteadthey 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 allow a performance of around two million transactions every 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

Because its like gold mining in that the bitcoins exist in the protocols design (just as the gold is underground), but they havent been brought out into the light yet (like the gold hasnt yet 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 bit, lets talk about nodes. A node is a powerful computer that runs the bitcoin applications and helps to keep bitcoin running by participating in the relay of information. Anyone can run a node, you simply download the bitcoin software (free) and also leave a certain port open (the drawback is that it consumes energy and storage space the network at time of writing takes 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 whole network fairly fast. .

Some nodes are mining nodes (usually known as miners). These group outstanding transactions into blocks and add them into the blockchain. How can they do this By solving a complex mathematical mystery that's a portion of this bitcoin app, and including the answer in the cube. The puzzle that needs solving is to find a number that, when combined with the information in the cube and passed through a hash function, creates a result that is within a certain range.

 

 

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(For fiction fans, 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.)

How do they find this number By guessing at random. The hash function which makes it impossible to predict exactly what the outcome will be. So, miners suppose the mystery number and apply the hash function to the combination of that guessed number and the information in the cube. The resulting hash has to start 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 which case 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 remainder of the network. All the other miners immediately stop work on that block link and begin trying to figure out the puzzle number for your next one. As a reward for its own work, the victorious miner has some new bitcoin. .

At the time of writing, the payoff is 12.5 bitcoins, which in time of writing is worth nearly $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 this reward, and it is a question of luck and computing power (the more guessing calculations you can perform, the luckier you're ).

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 opponents, 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 chips consumes. .

And, 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 worth of bitcoin relative to cost of electricity and hardware could go up during the next few years to partially compensate this reduction, but its not certain. .

The difficulty 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 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).

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