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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 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 about bitcoin mining, you envisage coins being dug out of the ground. But bitcoin isnt bodily, so why do we call it mining
Since its like gold mining in that 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 awakened ). The bitcoin protocol stipulates that 21 million bitcoins will exist at some point.
They get to do this as a reward for creating blocks of validated 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 simply download the bitcoin applications (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 carries up about 145GB).
One node will send information to some nodes that it knows, who will relay the information to nodes they know, etc.. That way it ends up getting around the whole network pretty quickly. .
Some nodes are mining nodes (usually referred to as miners). These group outstanding transactions into blocks and add them into the blockchain. How can they do so by solving a complex mathematical puzzle that is part of this bitcoin app, and including the answer in the cube. The mystery that needs solving is to find a number which, when combined with all the information in the cube and passed through a hash function, produces a result that is within a certain range.
How do they find this number By guessing at random. The hash function makes it impossible to forecast what the outcome will be. So, miners guess the puzzle number and apply the hash function to the combination of that guessed number and also the data in the cube. The resulting hash has to start with a pre-established number of zeroes.
Whats more, there might be several nonces that produce the desired result, or there may be none (in which case the miners keep trying, but using a different block configuration). .
The first miner to get a resulting hash within the desirable 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 figure out the puzzle number for your next one. As a reward for its work, the victorious miner has some new bitcoin. .
At the time of writing, the payoff 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 have a faster processor than your competitors, you have a better chance of finding the correct number before they do), but also because of the large amounts of power that running these processors consumes. .
And, the number of bitcoins awarded as a reward for solving the puzzle will decrease. Its 12.5 now, but it halves every four years or so (the next one is expected in 2020-21). The value of bitcoin relative to cost of power and hardware could extend up during the next few decades to partly compensate this reduction, but its not certain. .
The problem of this calculation (the required number of zeroes at the beginning of the hash string) is adjusted 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).