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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 per day. At 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. However, bitcoin isnt physical, so why do we call it mining
Because its like gold mining in that the bitcoins exist in the protocols design (like the gold exists underground), but they havent been introduced into the mild yet (like the gold hasnt been dug up). 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 talk about nodes. A node is a powerful computer that runs the bitcoin applications and helps to keep bitcoin running by participating in the relay of information. Anyone can run a node, you simply download the bitcoin applications (free) and also leave a certain port open (the downside is the fact 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 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 quickly. .
Some nodes are mining nodes (usually referred to as miners). These group outstanding transactions into blocks and add them into the blockchain. How can they do this By solving a intricate mathematical puzzle that's part of this bitcoin app, 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, creates a result that is within a certain range.
How can they find this find out here number By guessing at random. The hash function which 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 that guessed number and the information 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 intended result, or there might be none (in the event the miners keep trying, but with 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. All the other miners immediately cease work on that block and start trying to figure out the puzzle number for your next one. As a reward for the work, the victorious miner has some new bitcoin. .
In the time of writing, the payoff is 12.5 bitcoins, which in time of writing is worth almost $200,000.
Additionally, the costs of being a mining node are considerable, not only because of the effective hardware needed (if you have a faster processor than your opponents, you've got a better chance of finding the correct number before they do), but also due to the large amounts of power that running these processors consumes. .
And, the number of all bitcoins awarded as a reward for solving the puzzle will decrease. Its 12.5 now, but it halves every four years or so (the next one is anticipated in 2020-21). The worth of bitcoin relative to cost of electricity and hardware could extend up over the next few years to partly compensate this reduction, but its not certain. .
The problem of this calculation (the required number 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 has been attained (expected some time in 2140).