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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 procedure 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 from the ground. However, bitcoin isnt bodily, so why do we call it mining
Because its similar to gold mining in the bitcoins exist in the protocols design (like the gold exists underground), but they havent been introduced into the light yet (like the gold hasnt been dug up). The bitcoin protocol stipulates that 21 million bitcoins will exist at some point.
They get to perform so as a reward for creating cubes of validated transactions and including them in the blockchain.
Backtracking a little, lets talk about nodes. A node is a powerful computer which runs the bitcoin software 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 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 which it knows, who 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 referred to as miners). These group outstanding transactions into blocks and add them to the blockchain. How do they do this By solving a complex mathematical puzzle that's a portion of the bitcoin app, and including the answer in the cube. The puzzle that needs solving is to find a number which, when combined with the data in the cube and passed through a hash function, creates a result that is within a certain range.
How do they find this number By guessing at random. The hash function makes it impossible to forecast what the output 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 block. The resulting hash has to start with a pre-established number of zeroes.
Whats more, there might be several nonces that make the intended result, or there might 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 desirable range announces its victory to the remainder of the network. All the other miners immediately stop work on that block and begin 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. .
In the time of writing, the payoff is 12.5 bitcoins, which at time of writing will be worth almost $200,000.
Additionally, the expenses of being a mining node are considerable, not only because of the powerful hardware needed (in case you have a faster processor than your competitors, you've got a better chance of finding the correct number before they perform ), but also due to the large amounts of electricity that running these processors consumes. .
And, the number of all bitcoins given as a reward for solving the puzzle will decrease. Its 12.5 now, but it pits each four decades or so (the next one is expected in 2020-21). The value of bitcoin relative to cost of power and hardware could extend up during 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 adjusted frequently, so that it takes on average about 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 attained (anticipated some time in 2140).