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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 process to permit 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 bitcoin mining, you envisage coins being dug out of the ground. However, bitcoin isnt bodily, so why do we call it mining
Because its like gold mining in the bitcoins exist in the protocols design (just as the gold is underground), but they havent been brought out into the light yet (like the gold hasnt yet been dug up). 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 discuss nodes. A node is a powerful computer that runs the bitcoin software and assists keep bitcoin running by participating in the relay of information. Anyone can run a node, you just download the bitcoin software (free) and also leave a certain port open (the drawback 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, that 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 known as miners). These set outstanding transactions into blocks and add them to the blockchain. How can they do so by solving a intricate mathematical mystery that's part of this bitcoin app, and including the answer in the cube. The puzzle 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 is within a certain range.
How can they find this number By guessing at random. The hash function 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 the data in the block. The resulting hash has to start with a pre-established number of zeroes.
Whats more, there may be several nonces that produce the desired result, or there may be none (in which case the miners keep trying, but with a different block configuration). .
The first miner to acquire 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 start trying to figure out the puzzle number for the next one. As a reward for its own 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 almost $200,000.
Additionally, the costs of being a mining node are considerable, not only due to the powerful hardware needed (if you've got a faster processor than your competitors, you've got a better chance of finding the correct number before they perform ), but also because of the large amounts of power that running these chips consumes. .
And, the number of bitcoins given as a reward for solving the puzzle will decrease. Its 12.5 now, however, it halves every four decades 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 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 it requires on average about 10 minutes to process a block.
Why 10 minutes that's the amount of time the bitcoin programmers think is necessary for a continuous and diminishing flow of new coins until the highest number of 21 million is reached (anticipated some time in 2140).