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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 allow 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
Because its similar to 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 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 confirmed 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 to keep bitcoin running by participating in the relay of information. Anyone can run a node, you just download the bitcoin software (totally free ) and also 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 which it knows, that will relay the information to nodes that 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 do they do so by solving a complex mathematical mystery that's part of this bitcoin program, and including the answer in the cube. The puzzle that needs solving is to find a number which, when combined with the data in the cube and passed through a hash function, produces a result that's within a certain range.
How can they find this number By guessing at random. The hash function which makes it impossible to forecast what the output will be. So, miners guess the puzzle number and use the hash function to the combination of that guessed number and the data in the cube. The resulting hash must start with a pre-established number of zeroes.
Whats more, there may be several nonces that make 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 acquire 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 start trying to find out the mystery number for the next one. As a reward for the own work, the victorious miner gets some new bitcoin. .
In the time of writing, the payoff is 12.5 bitcoins, which at time of writing will be worth nearly $200,000.
Additionally, 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 have a better chance of finding the correct number before they do), but also because of the large amounts of electricity that running these processors consumes. .
And, the number of all bitcoins given as a reward for solving the mystery will decrease. Its 12.5 now, however, it halves every four years or so (the next one is expected in 2020-21). The worth of bitcoin relative to price of power and hardware could extend up during the next few decades to partially compensate this reduction, but its not certain. .
The difficulty of the calculation (the necessary 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 the bitcoin developers think is necessary to get a continuous and diminishing flow of new coins until the highest number of 21 million is reached (anticipated some time in 2140).