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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 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 physical, so why do we call it mining
Because 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 yet 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 blocks of confirmed transactions and including them in the blockchain.
Backtracking a bit, lets talk about 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 simply 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 a few nodes that it knows, that will relay the information to nodes that they know, etc.. That way it ends up getting around the entire network fairly fast. .
Some nodes are mining nodes (usually known as miners). These group 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 this bitcoin app, and including the answer in the block. The puzzle that needs solving is to find a number go to this site which, when combined with the data in the cube 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 makes it impossible to forecast what the output will be. So, miners guess navigate to this website the puzzle number and apply the hash function to the combination of the guessed number and 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 intended 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 victory to the remainder of the network. All the other miners immediately cease work on that block and begin trying to figure out the mystery number for your next one. As a reward for the own work, the victorious miner has some new bitcoin. .
In the time of writing, the reward is 12.5 bitcoins, which in time of writing is worth nearly $200,000.
Also, the costs of being a mining node are considerable, not only due to the effective 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 because of the large amounts of power that running these processors consumes. .
And, the number of all bitcoins given as a reward for solving the mystery 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 price of power and hardware could go up during the next few decades to partly compensate this reduction, but its not certain. .
The difficulty of the calculation (the necessary number of zeroes at the beginning of the hash string) is adjusted frequently, so it takes on average about 10 minutes to process a block.
Why 10 minutes That is the amount of time the bitcoin programmers think is necessary for a continuous and diminishing flow of new coins until the maximum number of 21 million is attained (expected some time in 2140).