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Instead, they went with Solution 2. The resulting currency, known as bitcoin cash, increased the blocksize to 8 Mb in order to accelerate the verification process to allow a performance of around two 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 physical, so why do we call it mining
Since its similar to gold mining in that the bitcoins exist in the protocols design (just as the gold exists underground), but they havent been brought out into the mild yet (just as the golden hasnt been dug up). The bitcoin protocol stipulates that 21 million bitcoins will exist at some point.
They get to do this as a reward for creating cubes of confirmed transactions and including them in the blockchain.
Backtracking a little, lets talk about nodes. A node is a powerful computer which runs the bitcoin software and helps 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 that it consumes energy and storage space the network at time of writing takes up about 145GB).
One node will send information to some nodes which it knows, who will relay the information to nodes that they know, etc.. That way it ends up getting around the entire network pretty fast. .
Some nodes are mining nodes (usually referred to as miners). These group outstanding transactions into blocks and add them into the blockchain. How do they do this By solving a intricate mathematical puzzle that is a portion of the bitcoin program, and including the answer in the cube. The puzzle that needs solving is to find a number which, when combined with the information in the block and passed via a hash function, creates a result that's within a certain range.
(For trivia lovers, this number is known as a nonce, which is a concatenation of number used once. In the instance 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 forecast what the output will be. So, miners suppose the mystery number and use the hash function to the combination of the guessed number and also the information in the cube. The resulting hash has to begin with a pre-established number of zeroes. moved here
Whats more, there may be several nonces that make the desired result, or there might 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 desired range announces its success to the rest of the network. The rest of the miners immediately cease work on that block and start trying to find out the puzzle number for the next one. As a reward for the work, the victorious miner gets some new bitcoin. .
In the time of writing, the reward is 12.5 bitcoins, which in time of writing will be worth almost $200,000.
Although its not nearly as cushy a deal as it sounds. There are a whole lot of mining nodes competing for that benefit, and it's a question of luck and computing power (the further guessing calculations you can perform, the luckier you are).
Additionally, 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 opponents, you have a better chance of finding the correct number before they perform ), but also because of the large amounts of electricity that running these processors consumes. .
And, the number of bitcoins awarded as a reward for solving the mystery will decrease. Its 12.5 now, but it pits each 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 during the next few years go to this web-site 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 takes 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 maximum number of 21 million is reached (expected some time in 2140).