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Instead, they went with Solution 2. The resulting currency, known as bitcoin cash, increased the blocksize to 8 Mb in order to accelerate the verification procedure to permit a performance of around 2 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. However, bitcoin isnt physical, so why do we call it mining
Since its like gold mining in that the bitcoins exist in the protocols design (just as the gold is underground), but they havent been introduced into the light yet (just as the golden hasnt been dug up). 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 little, lets discuss nodes. A node is a powerful computer which runs the bitcoin applications and helps 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 some nodes which it knows, who will relay the information to nodes that they know, etc.. This way it ends up getting around the whole network fairly fast. .
Some nodes are mining nodes (usually referred to as miners). These group 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 which, when combined with the information in the block 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 look at this website hash function which makes it impossible to predict what the output will be. So, miners guess the mystery number Free Satoshi Bitcoin and use the hash function to the combination of the 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 make the desired result, or there may be none (in the event the miners keep trying, but with 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. The rest of the miners immediately stop work on that block and start trying to figure out the mystery number for the next one. As a reward for the own work, the victorious miner gets some new bitcoin. .
At the time of writing, the reward is 12.5 bitcoins, which at time of writing will be worth nearly $200,000.
Also, the costs of being a mining node are considerable, not only due to the powerful hardware needed (if you've got a faster processor than your competitors, you've got a better chance of finding the correct number before they perform ), but also due to the large amounts of power that running these processors consumes. .
And, the useful reference number of bitcoins given as a reward for solving the puzzle will decrease. Its 12.5 now, however, 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 over 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 adjusted frequently, so it takes on average approximately 10 minutes to process a block.
Why 10 minutes that's the amount of time the bitcoin programmers think is necessary to get a steady and diminishing flow of new coins until the highest number of 21 million is attained (anticipated some time in 2140).