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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 allow a performance of around 2 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 bodily, so why do we call it mining
Since 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 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 blocks of confirmed transactions and including them in the blockchain.
Backtracking a little, lets talk about 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 just 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 takes up about 145GB).
One node will send information to a few nodes that it knows, that will relay the information to nodes that 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 do they do this By solving a intricate mathematical mystery that is a portion of the bitcoin app, and including the answer in the cube. The puzzle that needs solving is to find a number that, when combined with the data in the block and passed through a hash function, produces 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 suppose the mystery number and apply the hash function to the combination of the 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 might be several nonces that produce the desired result, or there might be none (in which case the miners keep trying, but using a different block configuration). .
The first miner to get a resulting hash within the desirable range announces its victory to the remainder of the network. The rest of the miners immediately stop work on that block and begin trying to figure out the mystery number for the next one. As a reward for its work, the victorious miner has some new bitcoin. .
At the time of writing, the payoff is 12.5 bitcoins, which at time of writing will linked here be worth nearly $200,000.
Additionally, the costs of being a mining node are considerable, not only due to the powerful hardware needed (if you have a faster processor than your competitors, you've got a better chance of finding the right number before they do), but also because of the large amounts of electricity that running these chips consumes. .
And, the number of all 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 worth of bitcoin relative to cost of electricity and hardware could go up during the next few decades to partially compensate this reduction, but its not certain. .
The difficulty of the calculation (the necessary 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 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 reached (expected some time in 2140).