Instead, they went with Solution 2. The resulting currency, known as bitcoin cash, increased the blocksize to 8 Mb in order to accelerate the verification process to allow a performance of around 2 million transactions every 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 from the ground. However, bitcoin isnt physical, so why do we call it mining

Since its similar to gold mining in that the bitcoins exist in the protocols design (like the gold is underground), but they havent been brought out into the light yet (like 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 confirmed transactions and including them in the blockchain.

Backtracking a little, lets talk about 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 software (free) and also leave a certain port open (the drawback is 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 that it knows, who will relay the information to nodes that they know, etc.. That way it ends up getting around the entire network fairly fast. .

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 this By solving a complex mathematical puzzle that's a portion of this 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 data in the cube and passed through a hash function, produces a result that's within a certain range.

(For trivia lovers, this number is called a nonce, which can be a concatenation of number used once. In the case of bitcoin, the nonce is an integer between 0 and 4,294,967,296.)

How do they find this number By guessing at random. The hash function makes it impossible to forecast exactly what the output will be. So, miners guess the puzzle number and apply 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 intended result, or there might be none (in which case the miners keep trying, but using a different block configuration). .

The first see this here miner to acquire a More Bonuses resulting hash within the desired range announces its victory to the remainder of the network. All the other miners immediately cease work on that block and start trying to figure out the mystery number for your next one. As a reward for the 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 nearly \$200,000.

Though its not nearly as cushy a deal as it sounds. There are a lot of mining nodes competing for this benefit, and it is a question of luck and computing power (the more guessing calculations you can perform, the luckier you're ).

Additionally, the expenses of being a mining node are considerable, not only because of the effective hardware needed (if you've got a faster processor than your opponents, you have a better chance of finding the correct number before they perform ), but also due to the large amounts of electricity 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 pits each four years or so (the next one is expected in 2020-21). The value of bitcoin relative to price of electricity and hardware could check this extend up over the next few decades to partially compensate this reduction, but its not certain. .

The difficulty of this calculation (the required number of zeroes at the beginning of the hash string) is corrected frequently, so that it requires on average approximately 10 minutes to process a block.

Why 10 minutes That is the amount of time the bitcoin programmers think is necessary for a continuous and diminishing flow of new coins until the highest number of 21 million is reached (expected some time in 2140).