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Instead, they went with Solution 2. The resulting currency, known as 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 similar to gold mining in that the bitcoins exist in the protocols design (like the gold is underground), but they havent been introduced into the mild yet (like the gold hasnt yet 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 blocks of validated transactions and including them in the blockchain.
Backtracking a little, lets talk about nodes. A node is a powerful computer that 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 applications (totally free ) and leave a certain port open (the drawback is the fact 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 which it knows, who will relay the information to nodes 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 cubes and add them to the blockchain. How can they do this By solving a complex mathematical puzzle that's a portion of the bitcoin program, and including the answer in the block. The puzzle that needs solving is to find a number that, when combined with all the data in the cube 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 forecast exactly what the output will be. So, miners suppose the puzzle number and use the hash function to the combination of the 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 the event the miners keep trying, but using a different block configuration). .
The first miner to get a resulting hash within the desirable range announces its success to the remainder of the network. The rest of the miners immediately stop work on that block and start trying to figure out the mystery number for the dig this next one. As a reward for its 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 nearly $200,000.
Additionally, the costs of being a mining node are considerable, not only due to the effective hardware needed (if you've got a faster processor than your competitors, you've got 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 all 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 partially compensate this reduction, but its not certain. .
The difficulty of this calculation (the required number of zeroes at the beginning of the hash string) is corrected frequently, so it takes on average about 10 minutes to process a block.
Why 10 minutes that's the amount of time that 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).