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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 2 million transactions per day. At 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 bodily, so why do we call it mining
Since its similar to gold mining in that the bitcoins exist in the protocols design (like the gold is underground), but they havent been introduced into the light yet (just as the gold hasnt yet been dug up). The bitcoin protocol stipulates that 21 million bitcoins will exist at some point.
They get to perform so 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 that 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 (free) and 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 that it knows, that will relay the information to nodes 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 can they do this By solving a complex mathematical mystery that is part of the bitcoin app, 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 can they find this number By guessing at random. The hash function makes it impossible to predict what the outcome will be. So, miners suppose the mystery number and apply the hash function to the combination of the guessed number and the information in the cube. The resulting hash has to begin with a pre-established number of zeroes.
Whats more, there may be several nonces that produce the desired result, or there may 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 victory to the remainder of the network. The rest of the miners immediately stop work on that block and begin trying to figure out the puzzle number for your next one. As a reward for its work, the victorious miner has some new bitcoin. .
In the time of writing, the reward is 12.5 bitcoins, which at time of writing will be worth almost $200,000.
Additionally, the expenses of being a mining node are considerable, not only because of the powerful hardware needed (in case you have a faster processor than your competitors, you've got a better chance of finding the correct number before they do), but also due to the large amounts websites of power that running these chips consumes. .
And, the number of bitcoins awarded as a reward for solving the puzzle will decrease. Its 12.5 now, however, it pits each four decades or so (the next one is expected in 2020-21). The worth of bitcoin relative to price of electricity and hardware could extend up over the next few years to partly compensate this reduction, but its not certain. .
The difficulty of this calculation (the required number of zeroes at the beginning of the hash string) is corrected frequently, so that it takes on average about 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 maximum number of 21 million is attained (anticipated some time in 2140).