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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 process to permit a performance of around two million transactions every 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 from the ground. However, bitcoin isnt physical, so why do we call it mining
Because its like gold mining in 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 cubes of validated transactions and including them in the blockchain.
Backtracking a little, lets discuss nodes. A node is a powerful computer which runs the bitcoin applications and assists keep bitcoin running by participating in the relay of information. Anyone can run a node, you simply download the bitcoin applications (totally free ) and also leave a certain port open (the downside is 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 which it knows, that 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 into the blockchain. How can they do so by solving a intricate mathematical mystery that is part 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 information in the cube and passed via a hash function, creates 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 exactly what the output will be. So, miners guess the puzzle number and use the hash function to the combination of that guessed number and also the information in the cube. The resulting hash must begin with a pre-established number of zeroes.
Whats more, there may be several nonces that produce the intended result, or there may be none (in which case the miners keep trying, but using a different block configuration). .
The first miner to acquire a resulting hash within the desired range announces 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 work, the victorious miner gets some new bitcoin. .
At the time of writing, the payoff is 12.5 bitcoins, which in time of writing will be worth nearly $200,000.
Also, the costs of being a mining node are considerable, not only because of the effective hardware needed (in case you have a faster processor than your opponents, you have a better chance of finding the correct number before they perform ), but also because of the large amounts of power 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 expected in 2020-21). The worth of bitcoin relative to cost of electricity and hardware could extend up during the next few decades to partially compensate this reduction, but its not certain. .
The difficulty of this calculation (the required number of zeroes at the beginning of the hash string) is adjusted frequently, so that it takes on average about 10 minutes to process a block.
Why 10 minutes That is the amount of discover this time that the bitcoin programmers think is necessary for a steady and diminishing flow of new coins until the maximum number of 21 million is reached (anticipated some time in 2140).