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Instead, they 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 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 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 introduced into the light yet (like the golden hasnt 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 discuss nodes. A node is a powerful computer which runs the bitcoin applications and helps keep bitcoin running by participating in the relay of information. Anyone can run a node, you just download the bitcoin applications (totally 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 takes 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.. This way it ends up getting around the whole network fairly fast. .
Some nodes are mining nodes (usually referred to as miners). These set 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 the bitcoin program, 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 through a hash function, produces a result that's 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 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 begin with a pre-established number of zeroes.
Whats more, there might be several nonces that make the desired result, or there might be none (in the event the miners keep trying, but using a different block configuration). .
The first miner to get a resulting hash within the desirable range announces its success to the rest of the network. The rest of the miners immediately cease work on that block and begin trying to find out the mystery number for the next one. As a reward for its 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.
Also, 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 competitors, you've got a better chance of finding the correct number before they perform Home Page ), but also because of the large amounts of electricity that running these chips consumes. .
And, the number of bitcoins given as a reward for solving the mystery will decrease. Its 12.5 now, however, it pits each four years or so (the next one like it is anticipated in 2020-21). The value of bitcoin relative to price of electricity and hardware could extend up during the next few decades to partly 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 that it requires on average 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 has been reached (anticipated some time in 2140).