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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 permit a performance of around 2 million transactions per 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 exists underground), but they havent been introduced into the light yet (just as the golden hasnt yet been awakened ). The bitcoin protocol stipulates that 21 million bitcoins will exist at some point.
They get to perform this as a reward for creating blocks of validated transactions and including them in the blockchain.
Backtracking a bit, 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 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 which it knows, who will relay the information to nodes they know, etc.. That way it ends up getting around the entire network fairly fast. .
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 this By solving a complex mathematical puzzle that is part of this bitcoin program, and including the answer in the cube. The puzzle that needs solving is to find a number which, when combined with the information in the block and passed via a hash function, creates a result that's within a certain range.
How can they find this number By guessing at random. The hash function which makes it impossible to predict exactly what the output will be. So, miners suppose the mystery number and use the hash function to the combination of the guessed number and also the information in the cube. The resulting hash must start with a pre-established number of zeroes.
Whats more, there may be several nonces that produce the desired result, or there may be none (in which case the miners keep trying, but with 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. All the other miners immediately cease work on that block and start trying to figure out the mystery number for the next one. As a reward for the work, the victorious miner has 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.
Additionally, the expenses of being a mining node are considerable, not only because of the powerful hardware needed (in case you've got a faster processor than your competitors, you have a better chance of finding the right number before they do), but also due to the large amounts of power that running these chips consumes. .
And, the number of 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 anticipated in 2020-21). The worth of bitcoin relative to cost of power and hardware could extend up over the next few decades to partially compensate this reduction, but its not certain. .
The problem of this calculation (the required number of zeroes at the beginning of the here hash string) is adjusted frequently, so that it requires on average about 10 minutes to process a block.
Why 10 minutes that's the amount of time that the bitcoin programmers think is necessary for a continuous and diminishing flow of new coins until the maximum number of 21 million has been attained (expected some time in 2140).