X11 Cryptocurrency for Dummies
Instead, they went with Solution 2. The resulting currency, called bitcoin cash, increased the blocksize to 8 Mb in order to accelerate the verification procedure to allow 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 about bitcoin mining, you envisage coins being dug out of the ground. But bitcoin isnt physical, so why do we call it mining
Since its like gold mining in the bitcoins exist in the protocols design (like the gold is underground), but they havent been introduced into the light yet (like the golden hasnt yet been awakened ). The bitcoin protocol stipulates that 21 million bitcoins will exist at some point.
They get to do this as a reward for creating cubes 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 assists to keep bitcoin running by participating in the relay of information. Anyone can run a node, you just 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 carries up about 145GB).
One node will send information to a few nodes that it knows, that will relay the information to nodes they know, etc.. That way it ends up getting around the whole network pretty quickly. .
Some nodes are mining nodes (usually known as miners). These group outstanding transactions into blocks and add them into the blockchain. How can they do this By solving a complex mathematical mystery that's a portion of this bitcoin app, and including the answer in the block. The mystery that needs solving is to find a number which, when combined with all the information in the cube and passed through 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 which makes it impossible to forecast exactly what the outcome will be. So, miners guess the mystery number and apply the hash function to the combination of that guessed number and the information in the block. The resulting hash must 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 which case Source 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 remainder of the network. All the other miners immediately cease work on that block and begin trying to figure out the mystery number for your 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 is worth nearly $200,000.
Additionally, the expenses of being a mining node are considerable, not only due to the effective hardware needed (in case you've got a faster processor than your opponents, you have a better chance of finding the right number before they perform ), but also due to 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, however, it pits each four years or so (the next one is expected in 2020-21). The worth of bitcoin relative to cost of power and hardware could go up over the next few decades to partly compensate this reduction, but its not certain. .
The problem of this calculation (the necessary number of zeroes at the beginning of the hash string) is corrected frequently, so it takes on average approximately 10 minutes to process a block.
Why 10 minutes that's the amount of time the bitcoin developers think is necessary for a continuous and diminishing flow of new coins until the highest number of 21 million has been reached (expected some time in 2140).