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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 procedure to allow 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 out of the ground. But bitcoin isnt bodily, so why do we call it mining
Since its similar to gold mining in the bitcoins exist in the protocols design (just as the gold is underground), but they havent been introduced into the light yet (just as the gold hasnt been dug up). 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 discuss nodes. A node is a powerful computer which runs the bitcoin applications and assists keep bitcoin running by participating in the relay of information. Anyone can run a node, you just download the bitcoin applications (totally free ) and also leave a certain port open (the downside is the fact 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, that will relay the information to nodes they know, etc.. This way it ends up getting around the entire network fairly fast. .
Some nodes are mining nodes (usually known as miners). These set outstanding transactions into blocks and add them into the blockchain. How do they do this By solving a complex 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 that, when combined with all the data in the block and passed via a hash function, creates a result that is within a certain range.
How do they find this number By guessing at random. The hash function which makes it impossible to predict exactly what the outcome will be. So, miners guess the puzzle number and use the hash function to the combination of the guessed number and also the information in the block. The resulting hash has to start with a pre-established number of zeroes.
Whats more, there might be several nonces that make the intended result, or there may 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 remainder 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 has some new bitcoin. .
In the time of writing, the payoff is 12.5 bitcoins, which at time of writing is worth almost $200,000.
Also, 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 competitors, you've got a better chance of finding the correct number before they perform ), but also because of the large amounts of power that running these a knockout post processors consumes. .
And, the number of all bitcoins awarded as a reward for solving the puzzle 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 go up during the next few years 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 requires on average about 10 minutes to process a block.
Why 10 minutes that's the amount of time the bitcoin developers think is necessary to get a steady and diminishing flow of new coins until the maximum number of 21 million has been reached (anticipated some time in 2140).