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Instead, they went with Solution 2. The resulting currency, called bitcoin cash, increased the blocksize to 8 Mb in order to accelerate the verification process to permit 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 out of the ground. But 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 introduced into the mild yet (like the gold hasnt yet 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 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 software and helps to 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 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 some nodes that it knows, who will relay the information to nodes they know, etc.. That way it ends up getting around the entire network pretty quickly. .
Some nodes are mining nodes (usually known as miners). These group outstanding transactions into cubes and add them to the blockchain. How can they do so by solving a complex mathematical mystery that's part of this bitcoin app, and including the answer in the block. 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 is within a certain range.
How can they find this number By guessing at random. The hash function makes it impossible to forecast what the output will be. So, miners suppose the mystery number and apply the hash function to the combination of the guessed number and also the information in the block. The resulting hash has to begin with a pre-established number of zeroes.
Whats more, there might be several nonces that produce the desired result, or there might be none (in the event the miners more helpful hints keep trying, but with a different block configuration). .
The first miner to get a resulting hash within the desirable range announces its success to the remainder of the network. All the other miners immediately stop work on that block and start trying to figure out the puzzle number for your next one. As a reward for its work, the victorious Learn More miner gets some new bitcoin. .
In the time of writing, the payoff is 12.5 bitcoins, which in time of writing is worth almost $200,000.
Also, the costs of being a mining node are considerable, not only because of the powerful hardware needed (if you have a faster processor than your competitors, you've got a better chance of finding the right number before they do), but also due to 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 anticipated in site link 2020-21). The value of bitcoin relative to cost of power and hardware could go up during the next few decades to partially 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 approximately 10 minutes to process a block.
Why 10 minutes That is the amount of time the bitcoin developers think is necessary to get a continuous and diminishing flow of new coins until the maximum number of 21 million has been attained (anticipated some time in 2140).