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Instead, they went with Solution 2. The resulting currency, called bitcoin money, increased the blocksize to 8 Mb in order to accelerate the verification procedure to permit a performance of around 2 million transactions every 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 out of the ground. But bitcoin isnt physical, so why do we call it mining
Since its like gold mining in the bitcoins exist in the protocols design (like the gold is underground), but they havent been introduced into the light yet (just as the golden hasnt yet been awakened ). The bitcoin protocol stipulates that 21 million bitcoins will exist at some point.
They get to do so as a reward for creating cubes of validated 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 assists keep bitcoin running by participating in the relay of information. Anyone can run a node, you just download the bitcoin software (totally 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 they know, etc.. This 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 so by solving a complex mathematical mystery that's a portion of the bitcoin program, and including the answer in the block. The mystery that needs solving is to find a number which, when combined with all the data in the cube and passed via a hash function, creates a result that is within a certain range.
How do they find this informative post number By guessing at random. The hash function which 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 the information 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 may be none (in the event the miners keep trying, but with a different block configuration). .
The first miner to get a resulting hash within the desirable range announces its success to the rest of the network. The rest of the miners immediately stop work on that block and start trying to figure out the mystery number for your next one. As a reward for the 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 will be worth nearly $200,000.
Also, the expenses 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 have a better chance of finding the right 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 mystery will decrease. Its 12.5 now, but it pits each four years or so (the next one is expected in 2020-21). The value of bitcoin relative to cost of electricity and hardware could go up over the next few years to partially 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 adjusted frequently, so that it takes on average approximately 10 minutes to process a block.
Why 10 minutes that's the amount of time the bitcoin developers think is necessary for a steady and diminishing flow of new coins until the highest number of 21 million has been attained (anticipated some time in 2140).