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Instead, they went with Solution 2. The resulting currency, called bitcoin cash, increased the blocksize to 8 Mb in order to accelerate the verification process to allow a performance of around two 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 from 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 is underground), but they havent been brought out into the light yet (like the golden hasnt 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 little, lets discuss nodes. A node is a powerful computer which 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 applications (totally free ) and leave a certain port open (the downside 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.. That way it ends up getting around the entire network fairly quickly. .
Some nodes are mining nodes (usually referred to as miners). These group outstanding transactions into cubes and add them into the blockchain. How do they do so by solving a intricate mathematical puzzle that is a portion of this bitcoin app, and including the answer in the cube. The puzzle that needs solving is to find a number which, 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 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 also the data in the block. The resulting hash must begin with a pre-established number of zeroes.
Whats more, there might be several nonces that produce 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 success to the rest of the network. All the other miners immediately cease work on that block and start trying to find out the mystery number for the next one. As a reward for its work, the victorious miner gets some new bitcoin. .
In the time of writing, the payoff is 12.5 bitcoins, which at time of writing will be worth nearly $200,000.
Additionally, the costs 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 have a better chance of finding the correct number before they perform ), but also because of the large amounts of power that running these processors consumes. .
And, the number of bitcoins awarded as a reward for solving the puzzle will decrease. Its 12.5 now, however, it halves every four years or so (the next one is anticipated in 2020-21). The value of bitcoin relative to price of electricity and hardware could go up over the next few years 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 that it requires on average approximately 10 minutes to process a block.
Why 10 minutes that's the amount of time the bitcoin programmers think is necessary to get a continuous and diminishing flow of new coins until the highest number of 21 million has been reached (expected some time in 2140).