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Instead, they went with Solution 2. The resulting currency, called bitcoin cash, 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 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 light yet (just as the gold hasnt been dug up). 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 that 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 software (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 some nodes that it knows, who will relay the information to nodes they know, etc.. That way it ends up getting around the entire network pretty fast. .
Some nodes are mining nodes (usually known as miners). These group outstanding transactions into cubes and add them to the blockchain. How can they do so by solving a intricate mathematical puzzle that's part of this bitcoin app, and including the answer in the cube. The puzzle that needs solving is to find a number which, when combined with the information in the cube and passed through a hash function, creates 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 employed once. In the instance of bitcoin, the nonce is an integer between 0 and 4,294,967,296.)
How do they find this number By guessing at random. The hash function which makes it impossible to forecast what the output will be. So, miners guess 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 start with a pre-established number of zeroes.
Whats more, there might be several nonces that make the desired result, or there may be none (in the event the miners keep trying, but using a different block configuration). .
The first miner to get a resulting hash within the desired range announces its success to the remainder of the network. All the other miners immediately stop work on that block and begin trying to find out the mystery number for your next one. As a reward for the work, the victorious miner has some new bitcoin. .
In the time of writing, the reward is 12.5 bitcoins, which in time of writing is worth almost $200,000.
Though its not nearly as cushy a bargain as it sounds. There are a lot of mining nodes competing for this benefit, and it is a question of fortune 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 because of the powerful hardware needed (in case you've got a faster processor than your competitors, you've got a better chance of finding the right number before they perform ), 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 it halves every four years or so (the next one is anticipated in 2020-21). The worth of bitcoin Look At This relative to cost of electricity and hardware could extend up during the next few decades 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 adjusted frequently, so that 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 steady and diminishing flow of new coins until the highest number of 21 million is attained (anticipated some time in 2140).