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Insteadthey went with Solution 2. The resulting currency, known as bitcoin money, increased the blocksize to 8 Mb in order to accelerate the verification procedure to allow a performance of around two 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 introduced into the light yet (just as 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 cubes of confirmed 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 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 some nodes that it knows, who will relay the information to nodes that they know, etc.. That way it ends up getting around the entire network pretty quickly. .
Some nodes are mining nodes (usually referred to as miners). These set outstanding transactions into cubes and add them into the blockchain. How do they do so by solving a complex mathematical puzzle that's a portion of the bitcoin app, 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 via a hash function, creates 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 predict exactly what the outcome will be. click site So, miners guess the puzzle number and apply the hash function to the combination of the guessed number and the information in the cube. The resulting hash must begin with a pre-established number of zeroes.
Whats more, there may be several nonces that produce the intended result, or there might be none (in which case 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 rest of the network. The rest of the miners immediately stop work on that block and start trying to figure out the puzzle number for the next one. As a reward for its own work, the victorious miner gets some new bitcoin. .
At the time of writing, the payoff is 12.5 bitcoins, which in time of writing will be worth almost $200,000.
Additionally, the costs of being a mining node are considerable, not only because of the effective hardware needed (if you have a faster processor than your opponents, you've got a better chance of finding the right number before they perform ), but also because of the large amounts of power that running these processors consumes. .
And, the number of all 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 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 problem of the calculation (the necessary number of zeroes at the beginning of the hash string) is adjusted frequently, so it requires on average find here about 10 minutes to process a block.
Why 10 minutes that's the amount of time that the bitcoin programmers think is necessary for a continuous and diminishing flow of new coins until the highest number of 21 million is reached (anticipated some time in 2140).