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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 procedure to permit a performance of around 2 million transactions every 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
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 light yet (like the golden hasnt 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 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 a few nodes which it knows, that will relay the information to nodes they know, etc.. This way it ends up getting around the entire network pretty fast. .
Some nodes are mining nodes (usually known as miners). These group outstanding transactions into blocks and add them into the blockchain. How can they do this By solving a intricate mathematical puzzle that's part of this 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 block and passed via a hash function, produces a result that's within a certain range.
(For trivia lovers, this here are the findings number is known as 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 can they find this number By guessing at random. The hash function which makes it impossible to forecast what the outcome will be. So, miners guess the mystery number and apply the hash function to the combination of that guessed number and also the information in the cube. The resulting hash must begin 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 acquire a resulting hash within the desirable range announces its success to the remainder of the network. The rest of the miners immediately stop work on that block and begin trying to figure out the mystery number for your next one. As a reward for official site its 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 almost $200,000.
Although its not nearly as cushy a bargain as it sounds. There are a lot of mining nodes competing for that benefit, and it is a question of fortune and computing power (the further guessing calculations you can perform, the luckier you are).
Also, the costs of being a mining node are considerable, not only because of the effective hardware needed (in case you've got 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 here amounts of electricity that running these processors consumes. .
And, the number of all bitcoins given as a reward for solving the puzzle will decrease. Its 12.5 now, but it pits each four decades or so (the next one is expected in 2020-21). The worth of bitcoin relative to price of power and hardware could go up over the next few years to partly compensate this reduction, but its not certain. .
The difficulty of this calculation (the necessary 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 is the amount of time that the bitcoin developers 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).