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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 from the ground. But bitcoin isnt bodily, so why do we call it mining
Because its like gold mining in the bitcoins exist in the protocols design (just as the gold is underground), but they havent been introduced into the mild 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 this as a reward for creating cubes of validated transactions and including them in the blockchain.
Backtracking a bit, lets discuss nodes. A node is a powerful computer which runs the bitcoin applications and helps keep bitcoin running by participating in the relay of information. Anyone can run a node, you simply download the bitcoin software (totally 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 they know, etc.. This 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 blocks and add them into the blockchain. How do they do so by solving a complex mathematical puzzle that is part of this bitcoin program, and including the answer in the block. The mystery that needs solving is to find a number that, when combined with the data 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 makes it impossible to forecast what the outcome will be. So, miners suppose the puzzle number and use the hash function to the combination of that guessed number and also the data in the block. The resulting hash has to 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 acquire a resulting hash within the desired range announces its victory to the remainder of the network. The rest of the miners immediately cease work on that block and start trying to figure out the mystery number for the next one. As a reward for its own work, the victorious miner has some new bitcoin. .
At 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 due to the effective hardware needed (in case you have a faster processor than your opponents, you've got a better chance of finding the right number before they do), but also because of the large amounts of power that running these chips consumes. .
And, the number of all bitcoins awarded 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 value of bitcoin relative to cost of power and hardware could extend up over the next few decades to partly compensate this reduction, but its not certain. .
The difficulty of this calculation (the necessary number of zeroes at the beginning of the hash string) is adjusted frequently, so it takes on average approximately 10 minutes to process a block.
Why 10 minutes That is the amount of time the bitcoin developers think is necessary to get a continuous and diminishing flow of new coins until the maximum number of 21 million has been reached (anticipated some time in 2140).