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Insteadthey went with Solution 2. The resulting currency, called bitcoin cash, increased the blocksize to 8 Mb in order to accelerate the verification procedure 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 about bitcoin mining, you envisage coins being dug from the ground. But bitcoin isnt physical, so why do we call it mining
Since its similar to gold mining in the bitcoins exist in the protocols design (like the gold exists underground), but they havent been brought out into the mild yet (just as the gold hasnt been awakened ). 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 validated transactions and including them in the blockchain.
Backtracking a bit, lets discuss nodes. A node is a powerful computer that runs the bitcoin applications and helps 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 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, 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 known as miners). These set outstanding transactions into blocks and add them into the blockchain. How do they do so by solving a complex mathematical puzzle that's part of this bitcoin program, and including the answer in the cube. The puzzle that needs solving is to find a number that, when combined with all the data in the cube and passed through a hash function, creates a result that is within a certain range.
(For trivia lovers, this number is called 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.)
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How do they find this number By guessing at random. The hash function which makes it impossible to predict what the outcome will be. So, miners suppose the puzzle number and use the hash function to the combination of that guessed number and the data in the cube. The resulting hash has to start with a pre-established number of zeroes.
Whats more, there may be several nonces that make the intended result, or there might be none (in which case the miners keep trying, but with a different block configuration). .
The first miner to get a resulting hash within the desired range announces its success to the remainder of the network. The rest of the miners immediately cease work on that block and start trying to find out the mystery number for your 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 almost $200,000.
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Though its not nearly as cushy a deal as it sounds. There are a lot of mining nodes competing for that benefit, and it's a question of fortune and computing power (the further guessing calculations you can execute, the luckier you're ).
And, the number of all bitcoins given as a reward for solving the mystery will decrease. Its 12.5 now, but it halves every four years or so (the next one is expected in 2020-21). The value of bitcoin relative to cost of electricity and hardware could go up during the next few decades to partly compensate this reduction, but its not certain. .
The problem of this 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 is the amount of time that the bitcoin programmers think is necessary to get a continuous and diminishing flow of new coins until the highest number of 21 million is find here reached (expected some time in 2140).