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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 every day. At 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. But bitcoin isnt bodily, so why do we call it mining
Since its like 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 yet been dug up). The bitcoin protocol stipulates that 21 million bitcoins will exist at some point.
They get to perform this as a reward for creating cubes 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 simply download the bitcoin applications (totally free ) and 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 a few nodes which it knows, that will relay the information to nodes they know, etc.. This 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 to the blockchain. How can they do so by solving a complex mathematical puzzle that is part of the bitcoin program, and including the answer in the block. The puzzle that needs solving is to find a number which, when combined with all the information in the block and passed via 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 predict exactly what the outcome will be. So, miners suppose the puzzle number and apply the hash function to the combination of the guessed number and also the data in the cube. The resulting hash has to begin with a pre-established number of zeroes.
Whats more, there may be several nonces that make the intended result, or there may be none (in which case the miners keep trying, but with a different block configuration). .
The first miner to acquire a resulting hash within the desired range announces its victory to the remainder of the network. The rest of the miners immediately stop work on that block and begin trying to find out the puzzle number for the next one. As a reward for its work, the victorious miner gets some new bitcoin. .
In the time of writing, the reward is 12.5 bitcoins, which at time of writing is worth nearly $200,000.
Also, the costs of being a mining node are considerable, not only because of the powerful hardware needed (if you've got a faster processor than your opponents, you've got a better chance of finding the right number before they do), but also due to the large amounts of electricity that running these processors consumes. .
And, the number of 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 anticipated in 2020-21). The value of bitcoin relative to price of power and hardware could go up over the next few years to partially 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 corrected frequently, so that it takes on average about 10 minutes to process a block.
Why 10 minutes That is the amount of time the bitcoin programmers think is necessary to get a continuous and diminishing flow of new coins until the maximum number of 21 million has been attained (expected some time in 2140).