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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 procedure to allow a performance of around two million transactions per day. In 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
Because its like gold mining in that the bitcoins exist in the protocols design (just as the gold is underground), but they havent been brought out into the mild yet (like the golden hasnt yet 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 blocks of validated transactions and including them in the blockchain.
Backtracking a bit, 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 simply 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 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 referred to as miners). These set outstanding transactions into cubes and add them into the blockchain. How can they do so by solving a intricate mathematical puzzle that's part of the bitcoin program, and including the answer in the block. The mystery that needs solving is to find a number that, when combined with the data click for more in the block and passed through a hash function, produces a result that's within a certain range.
How do they find this number By guessing at random. The hash function makes it impossible to predict exactly what the outcome will be. So, miners guess the puzzle number and apply the hash function to the combination of that guessed number and also the data in the block. 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 might be none (in which case the miners keep trying, but using a different block configuration). .
The first miner to get a resulting hash within the desired range announces its victory to the rest of the network. The rest of the miners immediately cease work on that block and begin trying to figure out the mystery number for your next one. As a reward for its own 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 almost $200,000.
Also, the costs of being a mining node are considerable, not only because of the powerful hardware needed (if you've got a faster processor than your opponents, you've got a better chance of finding the right number before they perform ), but also due to the large amounts of power that running these processors consumes. .
And, the number of bitcoins awarded as a reward for solving the puzzle will decrease. Its 12.5 now, however, it halves every four decades or so (the next one is expected in 2020-21). The worth of bitcoin relative to price of power and hardware could go up during the next few years to partly compensate this reduction, but its not certain. .
The difficulty of this calculation (the required number of zeroes about his at the beginning of the hash string) is adjusted frequently, so that it takes on average approximately 10 minutes to process a block.
Why 10 minutes That is 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).