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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 procedure to allow a performance of around 2 million transactions every day. In 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 bodily, so why do we call it mining
Because its like gold mining in that the bitcoins exist in the protocols design (like the gold exists underground), but they havent been introduced into the light yet (like the golden hasnt been awakened ). The bitcoin protocol stipulates that 21 million bitcoins will exist at some point.
They get to do so as a reward for creating cubes 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 assists to keep bitcoin running by participating in the relay of information. Anyone can run a node, you just download the bitcoin applications (free) and also 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 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 set outstanding transactions into blocks and add them into the blockchain. How can they do this By solving a complex mathematical puzzle that's a portion of the bitcoin program, 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 through a hash function, produces a result that is within a certain range.
How do they find this number By guessing at random. The hash function makes it impossible to forecast what the output will be. So, miners guess the puzzle number and apply the hash function to the combination of that guessed number and also 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 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. All the other miners immediately cease work on that block and start trying to find out the puzzle 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 at time of writing is worth almost $200,000.
Also, the expenses of being a mining node are considerable, not only due to the effective hardware needed (in case you've got a faster processor than your opponents, you've got a better chance of finding the correct number before they perform ), but also because of the large amounts of electricity that running these chips consumes. .
And, the number of all bitcoins given as a reward for solving the puzzle will decrease. Its home 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 price of electricity and hardware could go up during the next few years to partially compensate this reduction, but its not certain. .
The difficulty of the 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 developers think is necessary to get a steady and diminishing flow of new coins until the highest number of 21 million has been reached (expected some time in 2140).