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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 process to allow 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 bitcoin mining, you envisage coins being dug from the ground. However, bitcoin isnt physical, so why do we call it mining
Since its like gold mining in the bitcoins exist in the protocols design (just as the gold is underground), but they havent been introduced into the mild yet (like the golden 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 cubes of confirmed 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 assists to keep bitcoin running by participating in the relay of information. Anyone can run a node, you simply download the bitcoin software (totally free ) and 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 that it knows, that will relay the information to nodes they know, etc.. That way it ends up getting around the whole network fairly fast. .
Some nodes are mining nodes (usually known as miners). These set outstanding transactions into cubes and add them to the blockchain. How do they do this By solving a complex mathematical puzzle that is part of the bitcoin app, 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 block and passed through a hash function, creates 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 exactly what the outcome will be. So, miners suppose the mystery number and use the hash function to the combination of that guessed number and also 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 read what he said 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 its success to the remainder of the network. The rest of the miners immediately stop work on that block and begin trying to find out the puzzle 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 at time of writing is worth nearly $200,000.
Also, the costs of being a mining node are considerable, not only because of the powerful hardware needed (in case you've got a faster processor than your competitors, 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 processors consumes. .
And, the number of all bitcoins given as a reward for solving the puzzle will decrease. Its 12.5 now, but it halves every four years or so (the next one is anticipated in 2020-21). The worth of bitcoin relative to price of electricity and hardware could go up during the next few years to partly compensate this reduction, but its not certain. .
The problem of this calculation (the required number of zeroes at the beginning of the hash string) is corrected frequently, so that it takes on average approximately 10 minutes to process a block.
Why 10 minutes That is the amount of time the bitcoin developers think is necessary to get a continuous and diminishing flow of new coins until the maximum number of 21 million has been reached (anticipated some time in 2140).