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Insteadthey 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 out of the ground. But bitcoin isnt bodily, 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 light yet (like the gold hasnt yet been awakened ). 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 confirmed transactions and including them in the blockchain.
Backtracking a little, lets talk about 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 just download the bitcoin software (totally 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 a few nodes that it knows, that will relay the information to nodes that they know, etc.. That way it ends up getting around the entire network fairly quickly. .
Some nodes are mining nodes (usually referred to as miners). These set outstanding transactions into blocks and add them to the blockchain. How can they do this By solving a intricate mathematical puzzle that is part of the bitcoin program, 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 via a hash function, produces a result that is 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 mystery number and use the hash function to the combination of the guessed number and the information in the cube. The resulting hash has to begin with a pre-established blog number of zeroes.
Whats go to these guys more, there might be several nonces that produce the desired result, or there may 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 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 work, the victorious miner has some new bitcoin. .
At the time of writing, the reward is 12.5 bitcoins, which in time of writing will be worth almost $200,000.
Additionally, the costs of being a mining node are considerable, not only due to the powerful hardware needed (in case you have a faster processor than your competitors, 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 given as a reward for solving the puzzle will decrease. Its 12.5 now, but it pits each four years or so (the next one is anticipated in 2020-21). The worth of bitcoin relative to price of power and hardware could go up over the next few years to partly 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 it requires on average about 10 minutes to process a block.
Why 10 minutes that's the amount of time that the bitcoin developers think is necessary to get a continuous and diminishing flow of new coins until the highest number of 21 million has been attained (anticipated some time in 2140).