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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 procedure to permit 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 bitcoin mining, you envisage coins being dug from 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 brought out 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 perform this as a reward for creating blocks 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 software and helps to keep bitcoin running by participating in the relay of information. Anyone can run a node, you just 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 takes up about 145GB).
One node will send information to some nodes which it knows, that will relay the information to nodes that they know, etc.. That way it ends up getting around the whole network pretty fast. .
Some nodes are mining nodes (usually referred to as miners). These set outstanding transactions into cubes and add them into the blockchain. How do they do so by solving a complex mathematical mystery that is 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 the information in the cube and passed via a hash function, creates a result that is within a certain range.
How do they find this number By guessing at random. The hash function which makes it impossible to predict exactly what the outcome will be. So, miners suppose the puzzle number and use the hash function to the combination of the guessed number and also the data in try this site the block. The resulting hash has to start with a pre-established number of zeroes.
Whats more, there may be several nonces that produce the desired result, or there might be none (in the event the miners keep trying, but using a different block configuration). .
The first miner to get a resulting hash within the desired range announces its success to the remainder of the network. All the other miners immediately stop work on that block and begin trying to figure out the mystery number for your next one. As a reward for its 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 is worth almost $200,000.
Additionally, the costs 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 do), but also because of the large amounts of electricity that running these chips consumes. .
And, the number of all bitcoins awarded 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 anticipated in 2020-21). The value of bitcoin relative to price of power and hardware could go up over the next few decades 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 corrected frequently, so that it requires on average approximately 10 minutes to process a block.
Why 10 minutes That is the amount of time that the bitcoin programmers think is necessary for a continuous and diminishing flow of new coins until the highest number of 21 million has been attained (expected some time in 2140).