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Instead, they went with Solution 2. The resulting currency, known as bitcoin cash, increased the blocksize to 8 Mb in order to accelerate the verification process to permit a performance of around two 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 from the ground. But bitcoin isnt physical, so why do we call it mining
Since its like gold mining in that the bitcoins exist in the protocols design (just as the gold is underground), but they havent been brought out into the mild yet (like the golden 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 blocks of validated transactions and including them in the blockchain.
Backtracking a little, lets talk about nodes. A node is a powerful computer which runs the bitcoin applications and assists to keep bitcoin running by participating in the relay of information. Anyone can run a node, you just download the bitcoin software (free) and 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 which it knows, who will relay the information to nodes they know, etc.. This way it ends up getting around the whole network pretty fast. .
Some nodes are mining nodes (usually referred to as miners). These set outstanding transactions into cubes and add them to the blockchain. How can they do so by solving a complex mathematical mystery that is part of this bitcoin program, 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 block and passed via a hash function, produces a result that's within a certain range.
(For trivia lovers, this number is known as a nonce, which is 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 makes it impossible to forecast exactly what the outcome will be. So, miners suppose the mystery number and use the hash function to the combination of the guessed number and the information in the block. The resulting hash has to start 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 which case 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 start trying to figure out the mystery number for the next one. As a reward for its work, the victorious miner gets some new bitcoin. .
At the time of writing, the reward is 12.5 bitcoins, which in time of writing will be worth nearly $200,000.
Though its not nearly as cushy a bargain as it sounds. There are a whole lot of mining nodes competing for this benefit, and it's a question of fortune and computing power (the further guessing calculations you can execute, the luckier you're ).
Also, the expenses of being a mining node are considerable, not only due to the powerful hardware needed (if you have a faster processor than your competitors, you have a better chance of finding the correct number before they perform ), but also due to the large amounts of power that running these chips consumes. .
And, the number of bitcoins awarded as a reward for solving the puzzle will decrease. Its 12.5 now, however, it pits each four decades or so (the next one is anticipated in 2020-21). The value of bitcoin relative to cost of power and hardware could extend up during the next few years to partly 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 takes on average about 10 minutes to process a block.
Why 10 minutes That is the amount of time the bitcoin developers think is necessary for a continuous and diminishing flow of new coins a fantastic read until the highest number of 21 million is reached (anticipated some time in 2140).