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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 procedure to allow 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 bitcoin mining, you envisage coins being dug from the ground. But bitcoin isnt physical, so why do we call it mining

Since its like gold mining in the bitcoins exist in the protocols design (just as the gold exists underground), but they havent been brought out into the light yet (like the golden hasnt been awakened ). 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 validated transactions and including them in the blockchain.

Backtracking a bit, lets talk about nodes. A node is a powerful computer which runs the bitcoin applications 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 the fact 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 which it knows, that will relay the information to nodes they know, etc.. That way it ends up getting around the whole network pretty quickly. .

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

(For fiction fans, 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 makes it impossible to predict exactly what the outcome will be. So, miners guess the mystery number and use the hash function to the combination of the guessed number and the information in the block. The resulting hash must start with a pre-established number of zeroes.

Whats more, there may be several nonces that produce the desired 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 rest of the network. All the other miners immediately stop work on that block and begin trying to find out the puzzle number for your next one. As a reward for the work, the victorious miner gets some new bitcoin. .

At the time of writing, the reward 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 is a question of fortune and computing power (the more guessing calculations you can execute, the luckier you're ).

Additionally, visit here the expenses of being a mining node are considerable, not only because of the powerful hardware needed (in case you've got a faster processor than your competitors, you have a better chance of finding the correct number before they perform ), but also due to the large amounts of power that running these chips consumes. .

And, the number of bitcoins awarded as a reward for solving the puzzle will decrease. Its 12.5 now, but it pits each four decades or so (the next one Exodus NYC is expected in 2020-21). The value of bitcoin relative to cost of electricity and hardware could extend up during the next few years to partly compensate this reduction, but its not certain. .

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

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