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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 procedure to permit a performance of around two million transactions per day. In 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 out of the ground. However, bitcoin isnt physical, so why do we call it mining
Since its similar to gold mining in the bitcoins exist in the protocols design (just as the gold is underground), but they havent been brought out 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 so as a reward for creating blocks of confirmed transactions and including them in the blockchain.
Backtracking a bit, lets talk about nodes. A node is a powerful computer which runs the bitcoin software and assists to keep bitcoin running by participating in the relay of information. Anyone can run a node, you just download the bitcoin software (free) and also 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 some nodes that it knows, that will relay the information to nodes that they know, etc.. That way it ends up getting around the whole network pretty quickly. .
Some nodes are mining nodes (usually known as miners). These group outstanding transactions into cubes and add them to the blockchain. How can they do so by solving a intricate mathematical mystery that's a portion of the bitcoin program, and including the answer in the block. The mystery that needs solving is to find a number that, when combined with all the information in the block and passed through a hash function, produces a result that is within a certain range.
(For fiction fans, this number is called a nonce, which can be a concatenation of number used once. In the instance of bitcoin, the nonce is an integer between 0 and 4,294,967,296.)
How do they find this number By guessing at random. The hash function which 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 may be several nonces that make 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 success to the rest of the network. The rest of the miners immediately stop work on that block and begin trying to find out the mystery number for your next one. As a reward for the work, the victorious miner gets some new bitcoin. .
At the time of writing, the reward is 12.5 bitcoins, which at time of writing will be worth almost $200,000.
Though its not nearly as cushy a deal as it sounds. There are a lot of mining nodes competing for this reward, and it's a question of fortune and computing power (the further guessing calculations you can perform, the luckier you're ).
Additionally, the costs of being a mining node are considerable, not only due to 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 do), but also because of the large amounts of electricity that running these chips consumes. .
And, the number Read Full Report of all bitcoins awarded as a reward for solving the mystery will decrease. Its 12.5 now, see however, it pits each 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 the calculation (the required number of zeroes at the beginning of the hash string) is adjusted frequently, so it requires on average about 10 minutes to process a block.
Why 10 minutes That is the amount of time the bitcoin developers think is necessary for a continuous and diminishing flow of new coins until the highest number of 21 million is attained (anticipated some time in 2140).