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Instead, they went with Solution 2. The resulting currency, called 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. 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 out of the ground. But bitcoin isnt bodily, so why do we call it mining

Because its like gold mining in the bitcoins exist in the protocols design (just as the gold is underground), but they havent been brought out into the mild yet (just as 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 blocks of confirmed transactions and including them in the blockchain.

Backtracking a bit, lets talk about nodes. A node is a powerful computer which runs the bitcoin software and helps to keep bitcoin running by participating in the relay of information. Anyone can run a node, you just download the bitcoin applications (free) and also 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 a few nodes which it knows, who will relay the information to nodes that they know, etc.. This way it ends up getting around the whole network fairly fast. .

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

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(For trivia lovers, this number is called 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 guess the puzzle number and apply the hash function to the combination of that guessed number and the data in the cube. The resulting hash must 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 using a different block configuration). .

The first miner to get a resulting hash within the desirable range announces its victory to the rest of the network. All the other miners immediately stop work on that block and start trying to figure out the puzzle number for the 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 at time of writing will be 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 that benefit, and it's a question of fortune and computing power (the more guessing calculations you can perform, the luckier you are).

Additionally, the costs of being a mining node are considerable, not only because of the powerful hardware needed (in case you have a faster processor than your opponents, you've got a better chance of finding the correct number before they perform ), 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 puzzle will decrease. Its 12.5 now, however, 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 extend up over the next few years to partly 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 that it takes on average approximately 10 minutes to process a block.

Why 10 minutes That is the amount of time that the bitcoin programmers think is necessary to get a continuous and diminishing this contact form flow of new coins until the highest number of 21 million is attained (anticipated some time in 2140).

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