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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 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 out of the ground. However, bitcoin isnt physical, so why do we call it mining

Because its similar to gold mining in the bitcoins exist in the protocols design (just as the gold is underground), but they havent been introduced into the light yet (just as the gold hasnt been awakened ). The bitcoin protocol stipulates that 21 million bitcoins will exist at some point.

They get to do this as a reward for creating blocks 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 applications and assists keep bitcoin running by participating in the relay of information. Anyone can run a node, you just download the bitcoin applications (free) and 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 a few nodes which it knows, who will relay the information to nodes they know, etc.. This way it ends up getting around the entire 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 this By solving a intricate mathematical mystery that's part of this 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 information in the block and passed via a hash function, creates a result that's within a certain range.

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(For fiction fans, this number is called 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.)

How can they find this number By guessing at random. The hash function makes it impossible to forecast what the output will be. So, miners suppose the mystery number and use the hash function to the combination of that guessed number and also the information in the block. The resulting hash must start with a pre-established number of zeroes.

Whats more, there might be several nonces that produce 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 desired 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 figure out the puzzle number for the next one. As a reward for the work, the victorious miner gets some new bitcoin. .

At the time of writing, the payoff is 12.5 bitcoins, which in time of writing will be 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 reward, and it is a question of luck and computing power (the more guessing calculations you can execute, the luckier you are).

Also, the expenses of being a mining node are considerable, not only due to the powerful hardware needed (if you have a company website 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 chips consumes. .

And, the number of bitcoins given as a reward for solving the puzzle will decrease. Its 12.5 now, but it pits each four years or so (the next one is expected in 2020-21). The worth of bitcoin relative to cost of electricity and hardware could go up during the next few decades to partly compensate this reduction, but its not certain. .

The difficulty of this calculation (the necessary number of zeroes at the beginning of the Etrade Checking Routing Number hash string) is corrected frequently, so it takes on average about 10 minutes to process a block.

Why 10 minutes That is the amount of time that the bitcoin developers think is necessary for a steady and diminishing flow of new coins until the maximum number of 21 million has been attained (anticipated some time in 2140).

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