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Instead, they went with Solution 2. The resulting currency, known as bitcoin money, increased the blocksize to 8 Mb in order to accelerate the verification procedure to allow a performance of around 2 million transactions per 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 out of 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 (just as the gold hasnt yet been awakened ). 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 confirmed 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 assists keep bitcoin running by participating in the relay of information. Anyone can run a node, you simply download the bitcoin software (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 some nodes which it knows, that 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 mystery that is 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 via 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 which makes it impossible to forecast what the outcome will be. So, miners suppose the mystery number and use the hash function to the combination of that guessed number and the information in the block. The resulting hash must start with a pre-established number of zeroes.
Whats more, there might be several nonces that produce the intended result, or there may be none (in the event the miners keep trying, but with a different block see this here configuration). .
The first miner to acquire a resulting hash within the desirable range announces its success to the rest 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 the work, the victorious miner has some new bitcoin. .
At the time of writing, the reward is 12.5 bitcoins, which in time of writing will be worth almost $200,000.
Also, the costs of being a mining node are considerable, not only due to the effective 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 chips consumes. .
And, the number of all bitcoins given as a reward for solving the puzzle will decrease. Its 12.5 now, however, it pits each four decades or so (the next one is anticipated in 2020-21). The worth of bitcoin relative to price of power and hardware could extend up during the next few decades to partly compensate this reduction, but its not certain. .
The difficulty of the calculation (the required number of zeroes at the beginning of the hash string) is corrected frequently, so that it requires on average about 10 minutes to process a block.
Why 10 minutes That is the amount of time that the bitcoin developers think is necessary for a continuous and diminishing flow of new coins until the maximum number of 21 million is reached (expected some time in 2140).