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Instead, they 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 every day. In 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 from the ground. But 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 (just as the gold exists underground), but they havent been brought out into the light yet (like the gold hasnt been dug up). The bitcoin protocol stipulates that 21 million bitcoins will exist at some point.
They get to do this as a reward for creating blocks of confirmed transactions and including them in the blockchain.
Backtracking a bit, lets talk about nodes. A node is a powerful computer which runs the bitcoin software 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 drawback 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 entire network pretty fast. .
Some nodes are mining nodes (usually known as miners). These set outstanding transactions into blocks and add them to the blockchain. How can they do so by solving a intricate mathematical puzzle that is a portion of the bitcoin app, and including the answer in the cube. The puzzle that needs solving is to find a number that, when combined with all the information in the block and passed through 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 forecast exactly what the outcome will be. So, miners suppose the mystery number and apply the hash function to the combination of the guessed number and the data 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 might be none (in the event the miners keep trying, but with a different block configuration). .
The first miner to acquire a resulting hash within the desirable range announces its victory to the rest of the network. The rest of the miners immediately stop work on that block and begin trying to find out the mystery number for your next one. As a reward for its own work, the victorious miner gets some new bitcoin. .
In the time of writing, the reward is 12.5 bitcoins, which in 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 (if you have a faster processor than your opponents, you've got a better chance of finding the right number before they do), but also due to the large amounts of electricity 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, however, it pits each four decades or so (the next one is expected in 2020-21). The value of bitcoin relative to cost of electricity and hardware could extend up during the next few years to partially compensate this reduction, but its not certain. .
The problem of this calculation (the required number of zeroes more information at the beginning of the hash string) is adjusted frequently, so it requires on average about 10 minutes to process a block.
Why 10 minutes that's the amount of time 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).