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Insteadthey went with Solution 2. The resulting currency, called bitcoin money, increased the blocksize to 8 Mb in order to accelerate the verification process to allow a performance of around two million transactions every day. At 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

Since its like gold mining in the bitcoins exist in the protocols design (like the gold exists underground), but they havent been brought out into the light yet (like the golden hasnt been dug up). 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 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 applications and assists 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 downside is the fact 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.. That way it ends up getting around the whole network pretty fast. .

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

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(For fiction fans, this number is known my latest blog post as a nonce, which can be 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 makes it impossible to predict exactly what the output will be. So, miners suppose the puzzle number and apply the hash function to the combination of that guessed number and the information great post to read in the block. The resulting hash has to begin with a pre-established number of zeroes.

Whats more, there may be several nonces that make the desired result, or there might be none (in which case the miners keep trying, but using a different block configuration). .

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

In the time of writing, the reward is 12.5 bitcoins, which in time of writing will be worth almost $200,000.

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Although its not nearly as cushy a bargain as it sounds. There are a whole lot of mining nodes competing for this benefit, and it is a question of fortune and computing power (the more guessing calculations you can execute, the luckier you're ).

Also, the expenses of being a mining node are considerable, not only due to the powerful hardware needed (if you have a faster processor than your competitors, you have a better chance of finding the correct number before they perform ), but also because of the large amounts of electricity that running these chips consumes. .

And, the number of bitcoins given as a reward for solving the mystery will decrease. Its 12.5 now, but it halves every four decades or so (the next one is expected in 2020-21). The value of bitcoin relative to cost of electricity and hardware could go up over the next few decades to partly compensate this reduction, but its not certain. .

The problem of this calculation (the required number of zeroes at the beginning of the hash string) is adjusted 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 continuous and diminishing flow of new coins until the highest number of 21 million has been attained (expected some time in 2140).

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