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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 allow a performance of around two million transactions every 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. However, bitcoin isnt bodily, so why do we call it mining
Because its similar to gold mining in the bitcoins exist in the protocols design (just as the gold exists underground), but they havent been brought out into the light yet (just as the golden hasnt yet been dug up). 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 confirmed transactions and including them in the blockchain.
Backtracking a bit, lets talk about nodes. A node is a powerful computer that runs the bitcoin software and assists 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 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, that 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 group outstanding transactions into blocks and add them into the blockchain. How do they do this By solving a intricate mathematical puzzle that is part of this bitcoin app, and including the answer in the block. The mystery that needs solving is to find a number which, when combined with the information in the block and passed via 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 which makes it impossible to forecast what the output will be. So, miners suppose the puzzle number and use the hash function to the combination of the 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 produce 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 success to the rest 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 the own work, the victorious miner has some new bitcoin. .
In the time of writing, the reward is 12.5 bitcoins, which at time of writing is worth almost $200,000.
Additionally, the costs of being a mining node are considerable, not only because of the powerful hardware needed (in case you have a faster processor than your opponents, you've got a better chance of finding the correct number before they do), but also because of the large amounts of power that running these chips consumes. .
And, the number of all bitcoins given as a linked here reward for solving the mystery will decrease. Its 12.5 now, but it pits each four years or so (the next one is anticipated in 2020-21). The value of bitcoin relative to cost of power and hardware could extend up over the next few decades to partly 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 adjusted frequently, so it takes on average approximately 10 minutes to process a block.
Why 10 minutes that's the amount of time that the bitcoin developers think is necessary for a continuous and diminishing flow of new coins until the maximum number of 21 million is attained (expected some time in 2140).