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Insteadthey went with Solution 2. The resulting currency, called bitcoin money, increased the blocksize to 8 Mb in order to accelerate the verification procedure to allow a performance of around two million transactions per 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 from the ground. However, 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 (just as the gold exists underground), but they havent been introduced into the mild yet (like the gold hasnt been awakened ). The bitcoin protocol stipulates that 21 million bitcoins will exist at some point.
They get to do this 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 that runs the bitcoin applications and assists keep bitcoin running by participating in the relay of information. Anyone can run a node, you just download the bitcoin applications (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 some nodes that it knows, that will relay the information to nodes that they know, etc.. This way it ends up getting around the entire network pretty fast. .
Some nodes are mining nodes (usually referred to as miners). These set outstanding transactions into blocks and add them into the blockchain. How can they do so by solving a intricate mathematical mystery that's a portion of the bitcoin program, and including the answer in the cube. The mystery 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 is within a certain range.
How can they find this number By guessing at random. The hash function which makes it impossible to predict what the output will be. So, miners read the article suppose the mystery number and use the hash function to the combination of that guessed number and also the information in the cube. The resulting hash must start with a pre-established number of zeroes.
Whats more, there might be several nonces that produce the desired result, or there might 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 find out the puzzle number for the next one. As a reward for the work, the victorious miner has some new bitcoin. .
At the time of writing, the reward is 12.5 bitcoins, which in time of writing is worth nearly $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 opponents, you have a better chance of finding the right number before they perform ), but also due to 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, but it halves every four decades or so (the next one is expected in 2020-21). The value 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 necessary number of zeroes at the beginning of the hash string) is adjusted frequently, so that it requires on average approximately 10 minutes to process a block.
Why 10 minutes That is 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 has been reached (anticipated some time in 2140).