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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 procedure to permit 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 physical, so why do we call it mining

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

Backtracking a little, lets discuss nodes. A node is a powerful computer that runs the bitcoin software 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 drawback 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, that will relay the information to nodes that they know, etc.. This way it ends up getting around the whole network pretty fast. .

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

(For trivia lovers, this number is known as a nonce, which can be a concatenation of number used once. In the instance of bitcoin, the nonce is an integer between 0 and 4,294,967,296.)

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How can they find this number By guessing at random. The hash function 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 block. The resulting hash must 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 which case the miners keep trying, but using a different block configuration). .

The first miner to acquire a resulting hash within the desired range announces its victory to the rest of the network. The rest of the miners immediately stop work on that block and start trying to find out the puzzle number for your 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 in time of writing is 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 benefit, and it's a question of luck and computing power (the more guessing calculations you can perform, the luckier you you could look here are).

Also, the expenses of being a mining node are considerable, not only because of the effective hardware needed (if you've got a faster processor than your competitors, you have 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 puzzle will decrease. Its 12.5 now, but it halves every four decades or so (the next one is anticipated in 2020-21). The value of bitcoin relative to cost of power and hardware could extend up during 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 to get a continuous and diminishing flow of new coins until the maximum number of 21 million is reached (anticipated some time in 2140).