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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 every 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

Since its similar to gold mining in that the bitcoins exist in the protocols design (like the gold is underground), but they havent been introduced into the mild yet (like the golden 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 cubes 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 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 drawback is that it consumes energy and storage space the network at time of writing takes up about 145GB).

One node will send information to a few nodes that it knows, that will relay the information to nodes they know, etc.. This way it ends up getting around the whole network fairly fast. .

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

(For fiction fans, 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 guess the puzzle number and use the hash function to the combination of the guessed number and the information in the block. The resulting hash must 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 the event the miners keep trying, but with a different block configuration). .

The first miner to get a resulting hash within the desirable range announces its success to the rest of the network. The rest of the miners immediately stop work on that block and begin trying to find out the puzzle number for the next one. As a reward for the own work, the victorious miner gets some new bitcoin. .

At the time of writing, the reward is 12.5 bitcoins, which in time of writing is worth nearly $200,000.

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Although its not nearly as cushy a deal as it my company sounds. There are a whole lot of mining nodes competing for this reward, and it's a question of fortune and computing power (the more guessing calculations you can perform, the luckier you are).

Additionally, the expenses 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 due to the large amounts of power that running these processors 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 worth of bitcoin relative to price of electricity and hardware could go up during the next few decades 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 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 steady and diminishing flow of new coins until the maximum number of 21 million has been attained (anticipated some time in 2140).