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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 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 physical, so why do we call it mining

Because 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 mild yet (like the gold hasnt yet been awakened ). The bitcoin protocol stipulates that 21 million bitcoins will exist at some point.

They get to perform this 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 which runs the bitcoin software and helps to keep bitcoin running by participating in the relay of information. Anyone can run a node, you simply download the bitcoin applications (totally 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 a few nodes that it knows, who will relay the information to nodes that they know, etc.. That way it ends up getting around the whole network pretty quickly. .

Some nodes are mining nodes (usually referred to as miners). These group outstanding transactions into blocks and add them to the blockchain. How do they do this By solving a intricate mathematical puzzle that's a portion of the bitcoin program, and including the answer in the block. The puzzle that needs solving is to find a number that, when combined with the data in the cube 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 my website integer between 0 and 4,294,967,296.)

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How do they find this number By guessing at random. The hash function makes it impossible to predict what the output will be. So, miners guess the puzzle number and use the hash function to the combination of the guessed number and the data in the block. The resulting hash must begin with a pre-established number of zeroes.

Whats more, there might be several nonces that produce 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 desirable range announces its victory to the rest of the network. All the other miners immediately stop work on that block and begin trying to find out the mystery number for the next one. As a reward for the work, the Fastest Way To Earn Bitcoins victorious miner has some new bitcoin. .

In the time of writing, the reward is 12.5 bitcoins, which at 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 benefit, and it's a question of fortune and computing power (the more guessing calculations you can perform, the luckier you are).

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

And, the number of bitcoins awarded as a reward for solving the mystery will decrease. Its 12.5 now, however, it pits each four years or so (the next one is anticipated in 2020-21). The value of bitcoin relative to cost of power and hardware could go up during the next few decades to partially 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 that it requires on average about 10 minutes to process a block.

Why 10 minutes that's the amount of time the bitcoin developers think is necessary to get a steady and diminishing flow of new coins until the highest number of 21 million is attained (anticipated some time in 2140).