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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 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 about bitcoin mining, you envisage coins being dug out of the ground. But bitcoin isnt physical, so why do we call it mining
Because its similar to gold mining in that the bitcoins exist in the protocols design (like the gold exists underground), but they havent been introduced into the light yet (just as the golden hasnt yet been dug up). 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 validated 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 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 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 some nodes that it knows, who will relay the information to nodes that they know, etc.. This way it ends up getting around the whole network pretty fast. .
Some nodes are mining nodes (usually referred to as miners). These set outstanding transactions into cubes and add them to the blockchain. How can they do this By solving a intricate mathematical puzzle that's part of the bitcoin app, and including the answer in the block. The puzzle that needs solving is to find a number which, when combined with the information in the cube and passed through a hash function, creates a result that is within a certain range.
(For fiction fans, this number is known as a nonce, which can be a concatenation of number employed 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 makes it impossible to predict what the outcome will be. So, miners suppose the puzzle number and use the hash function to the combination of the guessed number and also the information in the block. The resulting hash has to start with a pre-established number of zeroes.
Whats more, there may be several nonces that produce the intended result, or there might 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 desired range announces its victory to the remainder of the network. All the other miners immediately stop work on that block and begin trying to find out the puzzle number for your next review one. As a reward for its own work, the victorious miner gets some new bitcoin. .
At the time of writing, the reward is 12.5 bitcoins, which in time of writing is worth almost $200,000.
Though its not nearly as cushy a deal as it sounds. There are a whole lot of mining nodes competing for that reward, and it is a question of fortune and computing power (the further guessing calculations you can perform, the luckier you are).
Also, the costs of being a mining node are considerable, not only because of the powerful hardware needed (if you've got a faster processor than your competitors, you've got a better chance of finding the correct number before they perform ), but also because of the large amounts of electricity that running these processors consumes. .
And, the number of bitcoins given as a reward for solving the puzzle will decrease. Its 12.5 now, however, it halves every four decades or so (the next one is anticipated in 2020-21). The value of bitcoin relative to price of power and hardware could go up during the next few years to partially compensate this reduction, but its not certain. .
The problem of this calculation (the necessary 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's the amount of time that the bitcoin developers think is necessary for a steady and diminishing flow of new coins until the maximum number of 21 million is reached (expected some time in 2140).