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Insteadthey 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. In 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 physical, so why do we call it mining

Since its similar to 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 (just as the gold hasnt yet 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 cubes of confirmed transactions and including them in the blockchain.

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

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

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(For trivia lovers, this number is known as a nonce, which is try here a concatenation of number used once. In the case 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 exactly what the outcome will be. So, miners suppose the mystery number and use 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 make the desired result, or there may be none (in the event the about his miners keep trying, but with a different block configuration). .

The first miner to acquire a resulting hash within the desired range announces its success to the remainder of the network. The rest of the miners immediately stop work on that block and start trying to find out the mystery number for the next one. As a reward for the work, the victorious miner has some new bitcoin. .

At the time of writing, the payoff 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 bargain as it sounds. There are a lot of mining nodes competing for that reward, and it's a question of fortune and computing power (the further guessing calculations you can perform, the luckier you are).

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

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

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

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