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Insteadthey 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 allow a performance of around 2 million transactions every 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 out of the ground. But bitcoin isnt bodily, so why do we call it mining
Because its similar to gold mining in that the bitcoins exist in the protocols design (just as the gold exists underground), but they havent been brought out into the light yet (just as the gold hasnt yet 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 little, lets talk about 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 software (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 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 whole network pretty fast. .
Some nodes are mining nodes (usually referred to as miners). These set outstanding transactions into blocks and add them into the blockchain. How do they do so by solving a intricate mathematical puzzle that's part of this bitcoin program, and including the answer in the block. The mystery 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 is within a certain range.
How do they find this number By guessing at random. The hash function which makes it impossible to forecast what the outcome will be. So, miners guess the puzzle number and apply the hash function to the combination of that guessed number and also the data in the cube. The resulting hash has to begin with a pre-established number of zeroes.
Whats more, there may be several nonces that make the intended result, or there may 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 your next one. As a reward for its work, the victorious miner has some new bitcoin. .
In the time of writing, the payoff is 12.5 bitcoins, which discover this at time of writing will be worth almost $200,000.
Additionally, 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 power that running these chips 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 decades or so (the next one is anticipated in 2020-21). The worth of bitcoin relative to cost of electricity and hardware could go up over the next few years to partially compensate this reduction, but its not certain. .
The difficulty of the calculation (the required 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 that the bitcoin developers think is necessary to get a steady and diminishing flow of new coins until the maximum number of 21 million has been attained (anticipated some time in 2140).