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Insteadthey went with Solution 2. The resulting currency, called bitcoin cash, increased the blocksize to 8 Mb in order to accelerate the verification process to permit 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. However, bitcoin isnt physical, so why do we call it mining
Since its similar to gold mining in that the bitcoins exist in the protocols design (like the gold exists underground), but they havent been brought out into the light yet (like the gold hasnt been awakened ). The bitcoin protocol stipulates that 21 million bitcoins will exist at some point.
They get to do so as a reward for creating blocks of validated transactions and including them in the blockchain.
Backtracking a bit, lets discuss nodes. A node is a powerful computer that runs the bitcoin applications and helps keep bitcoin running by participating in the relay of information. Anyone can run a node, you simply download the bitcoin software (totally 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 some nodes that it knows, that will relay the information to nodes they know, etc.. That way it ends up getting around the entire 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 is a portion of this bitcoin program, and including the answer in the cube. The mystery that needs solving is to find a number which, when combined with all the information in the block and passed through 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 exactly what the output will be. So, miners guess the puzzle number and use the hash function to the combination of the guessed number and also 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 may be none (in which case 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. The rest of the 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 own work, the victorious miner gets some new bitcoin. .
At the time of writing, the reward is 12.5 bitcoins, which at time of writing is worth almost $200,000.
Additionally, the expenses of being a mining node are considerable, not only due to the powerful hardware needed (in case you have a faster processor than your competitors, you have a better chance of finding the right number before they do), but also because of the large amounts of electricity that running these processors consumes. .
And, the number of bitcoins awarded as a reward for solving the mystery will decrease. Its 12.5 now, however, it halves every four decades or so (the next one is expected in 2020-21). The worth of bitcoin relative to cost of electricity and hardware could extend up over the next few decades to partly compensate this reduction, but its not certain. .
The difficulty of this calculation (the necessary number why not try here of zeroes at the beginning of the hash string) is adjusted frequently, so that it takes on average approximately 10 minutes to process a block.
Why 10 minutes That is 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 attained (expected some time in look at here 2140).