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Insteadthey 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 allow 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 about bitcoin mining, you envisage coins being dug from the ground. However, bitcoin isnt physical, so why do we call it mining
Since 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 mild yet (like the gold hasnt yet been dug up). 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 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 applications (free) and also leave a certain port open (the downside 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 entire network pretty fast. .
Some nodes are mining nodes (usually referred to as miners). These group outstanding transactions into blocks and add them into the blockchain. How can they do so by solving a intricate mathematical puzzle that is a portion of the bitcoin program, and including the answer in the cube. The puzzle that needs solving is to find a number which, when combined with the data in the cube and passed via a hash function, produces 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 predict what the output will be. So, miners suppose the puzzle number and use the hash function to the combination of the 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 intended result, or there might be none (in which case the miners keep trying, but with a different block configuration). .
The first miner to acquire a resulting hash within the desired range announces use this link its success to the remainder of the network. All the other miners immediately cease work on that block and begin trying to figure out the puzzle number for the next one. As a reward for the own work, the victorious miner gets some new bitcoin. .
In the time of writing, the reward is 12.5 bitcoins, which at time of writing will be worth almost $200,000.
Also, the expenses of being a mining node are considerable, not only because of the powerful hardware needed (in case you have a faster processor than your opponents, 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 processors consumes. .
And, the number of bitcoins awarded as a reward for solving the mystery will decrease. Its 12.5 now, but 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 extend up over the next few decades to partially compensate this reduction, but its not certain. .
The problem of the calculation (the necessary 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's the amount of time that the bitcoin programmers think is necessary to get a steady and diminishing flow of new coins until the highest number of 21 million is reached (anticipated some time in 2140).