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Instead, they went with Solution 2. The resulting currency, known as bitcoin money, increased the blocksize to 8 Mb in order to accelerate the verification procedure to permit a performance of around 2 million transactions per day. At 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 bodily, 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 (just as 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 cubes of confirmed transactions and including them in the blockchain.

Backtracking a bit, lets discuss nodes. A node is a powerful computer that runs the bitcoin applications and helps 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 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 quickly. .

Some nodes are mining nodes (usually known as miners). These set outstanding transactions into blocks and add them to the blockchain. How do they do this By solving a intricate mathematical puzzle that is a portion of the bitcoin app, and including the answer in the block. The puzzle that needs solving is to find a number that, when combined with the information in the cube and passed via a hash function, produces a result that is 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 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 which makes it impossible to predict what the output will be. So, miners suppose the puzzle number and use the hash function to the combination of that guessed number and the information in the cube. 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 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 victory to the remainder of the network. All the other miners immediately cease work on that block and begin trying to find out the mystery number for the next one. As a reward for its own work, the victorious miner has some new bitcoin. .

In the time of writing, the payoff is advice 12.5 bitcoins, which in 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 lot of mining nodes competing for this reward, and it is a question of luck and computing power (the more guessing calculations you can execute, the luckier you are).

Also, the costs of being a mining node are considerable, not only due to the effective hardware needed (if you have a faster processor than your opponents, you've got a better chance of finding the right number before they do), but also because of the large amounts of electricity that running these processors consumes. .

And, the number of all bitcoins given as a reward for solving the mystery will decrease. Its 12.5 now, but important link it halves every four years or so (the next one is anticipated in 2020-21). The worth of bitcoin relative to price of power and hardware could go up over the next few years to partially compensate this reduction, but its not certain. .

The difficulty of this calculation (the necessary 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's the amount of time the bitcoin developers think is necessary for a continuous and diminishing flow of new here coins until the highest number of 21 million is reached (expected some time in 2140).