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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 process to permit a performance of around two million transactions per 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 out of the ground. However, bitcoin isnt bodily, so why do we call it mining
Because its like gold mining in the bitcoins exist in the protocols design (just as the gold exists underground), but they havent been brought out into the light yet (like the golden hasnt yet been dug up). The bitcoin protocol stipulates that 21 million bitcoins will exist at some point.
They get to perform this as a reward for creating cubes of confirmed transactions and including them in the blockchain.
Backtracking a bit, lets talk about nodes. A node is a powerful computer that runs the bitcoin applications and helps to keep bitcoin running by participating in the relay of information. Anyone can run a node, you just download the bitcoin software (free) and also leave a certain port open (the drawback is the fact 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.. That way it ends up getting around the whole network fairly quickly. .
Some nodes are mining nodes (usually referred to as miners). These group outstanding transactions into cubes and add them into the blockchain. How can they do so by solving a complex mathematical puzzle that is a portion of this bitcoin program, and including the answer in the block. 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's within a certain range.
(For fiction fans, this number is called a nonce, which is a concatenation of number used once. In the case of bitcoin, the nonce is an integer between 0 and 4,294,967,296.)
How do they find this number By guessing at random. The hash function which makes it impossible to predict what the outcome will be. So, miners guess the mystery number and apply the hash function to the combination of the guessed number and also the data next in the block. 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 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 desirable range announces its victory to the rest of the network. All the other miners immediately stop work on that block and begin trying to find out a fantastic read 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 at time of writing will be worth almost $200,000.
Though its not nearly as cushy a deal as it sounds. There are a whole lot of mining nodes competing for that benefit, and it is a question of fortune and computing power (the more guessing calculations you can execute, the luckier you're ).
Also, the expenses of being a mining node are considerable, not only because of the effective hardware needed (if you have a faster processor than your opponents, you have a better chance of finding the right number before they do), but also due to the large amounts of power 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, however, it halves every four years or so (the next one is anticipated in 2020-21). The value of bitcoin relative to cost of power and hardware could go up over the next few years to partially 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 it requires on average about 10 minutes to process a block.
Why 10 minutes that's the amount of time that the bitcoin programmers think is necessary for a steady and diminishing flow of new coins until the highest number of 21 million is reached (expected some time in 2140).