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

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

Backtracking a bit, lets discuss nodes. A node is a powerful computer which runs the bitcoin software and assists to keep bitcoin running by participating in the relay of information. Anyone can run a node, you just download the bitcoin software (totally 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 some nodes which it knows, that will relay the information to nodes they know, etc.. This way it ends up getting around the whole network fairly quickly. .

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

(For trivia lovers, this number is called a nonce, which is a concatenation of number employed once. In the case 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 what the outcome will be. So, miners suppose the mystery number and apply the hash function to the combination of that guessed number and the data in the cube. The resulting hash has to begin 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 with a different block configuration). .

The first miner to acquire a resulting hash within the desired range announces its victory to the remainder 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 gets some new bitcoin. .

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

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

Additionally, the costs of being a mining node are considerable, not only due to the powerful 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 power that running these processors consumes. .

And, the number of all Visit This Link bitcoins awarded 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 cost of electricity and hardware could go up over the next few years 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 corrected frequently, so it requires 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 flow of new coins until the highest number of 21 million is attained (anticipated some time in 2140).