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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 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. But 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 introduced into the mild yet (like the golden hasnt 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 blocks of confirmed transactions and including them in the blockchain.
Backtracking a little, lets discuss nodes. A node is a powerful computer which runs the bitcoin software and assists keep bitcoin running by participating in the relay of information. Anyone can run a node, you simply download the bitcoin applications (free) and also leave a certain port open (the drawback 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 they know, etc.. That way it ends up getting around the entire network fairly quickly. .
Some nodes are mining nodes (usually known as miners). These set outstanding transactions into cubes and add them into the blockchain. How can they do this By solving a intricate mathematical puzzle that is part of the bitcoin program, and including the answer in the block. 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, produces a More Info result that's within a certain range.
How can they find this number By guessing at random. The hash function which makes it impossible to predict what the outcome will be. So, miners suppose the puzzle number and use the hash function to the combination of that guessed number and also the data in the block. The resulting hash must begin with a pre-established number of zeroes.
Whats more, there may 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 acquire a resulting hash within the desirable range announces its victory to the rest of the network. The rest of the miners immediately cease work on that block and begin trying to find out the puzzle number for your next one. As a reward for the work, the victorious miner helpful hints gets some new bitcoin. .
In the time of writing, the payoff is 12.5 bitcoins, which at time of writing will be worth nearly $200,000.
Additionally, the expenses 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 do), but also because of the large amounts of power that running these processors consumes. .
And, the number of all bitcoins awarded as a reward for solving the puzzle will decrease. Its 12.5 now, but it halves every four years or so (the next one is expected in 2020-21). The value of bitcoin relative to price of electricity and hardware could extend up over the next few decades to partly compensate this reduction, but its not certain. .
The difficulty of the calculation (the necessary number of zeroes at the beginning of the hash string) is adjusted frequently, so that it takes on average about 10 minutes to process a block.
Why 10 minutes that's the amount of time that the bitcoin developers think is necessary for a continuous and diminishing flow of new coins until the maximum number of 21 million has been reached (anticipated some time in 2140).