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Insteadthey went with Solution 2. The resulting currency, known as bitcoin money, increased the blocksize to 8 Mb in order to accelerate the verification process 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 bitcoin mining, you envisage coins being dug out of 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 mild yet (like the gold hasnt 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 blocks of validated 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 keep bitcoin running by participating in the relay of information. Anyone can run a node, you simply download the bitcoin applications (free) and leave a certain port open (the drawback 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 which it knows, who will relay the information to nodes that 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 to the blockchain. How do they do this By solving a intricate mathematical puzzle that is part of this bitcoin app, and including the answer in the cube. The mystery that needs solving is to find a number that, when combined with all the information in the block and passed via a hash function, produces try this a result that is within a certain range.
(For trivia lovers, this number is called a nonce, which can be 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 makes it impossible to predict exactly what the output will be. So, miners suppose the puzzle number and use the hash function to the combination of that guessed number and the data in the block. The resulting hash must begin with a pre-established number of zeroes.
Whats more, there might be several nonces that produce the intended 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 desirable 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 mystery number for the next one. As a reward for its work, the victorious miner gets some new bitcoin. .
At the time of writing, the reward is 12.5 bitcoins, which in time of writing is worth nearly $200,000.
Although its not nearly as cushy a bargain as it sounds. There are a lot of mining nodes competing for this reward, and it's a question of fortune and computing power (the more guessing calculations you can perform, the luckier you're ).
Additionally, the expenses of being a mining node are considerable, not only because of the effective hardware needed (if you've got a faster processor than your opponents, you have a better chance of finding the right number before they do), but also because of the large amounts of electricity that running these chips consumes. .
And, the number of bitcoins awarded as see this site a reward for solving the mystery will decrease. Its 12.5 now, but it halves every four decades or so (the next one is expected in 2020-21). The worth 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 difficulty of this calculation (the required number of zeroes at the beginning of the hash string) is corrected frequently, so that 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 to get a steady and diminishing flow of new coins until the highest number of 21 million is reached (anticipated some time in 2140).