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Insteadthey 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 per 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 physical, 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 brought out 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 blocks of confirmed transactions and including them in the blockchain.

Backtracking a little, lets discuss 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 software (totally free ) and also leave a certain port open (the downside is 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 whole network fairly quickly. .

Some nodes are mining nodes (usually known as miners). These group outstanding transactions into cubes and add them to the blockchain. How do they do so by solving a complex mathematical puzzle that's part of this bitcoin program, and including the answer in the cube. The mystery that needs solving is to find a number which, when combined with the information in the block and passed via a hash function, produces a result that's within a certain range.

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(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 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 that guessed number and also the data in the block. The resulting hash has to begin with a pre-established number of zeroes.

Whats more, there may be several nonces that make the desired result, or there might 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 start trying to find out the puzzle number for the next one. As a reward for the own work, the victorious miner gets some new bitcoin. .

In the time of writing, the reward is 12.5 bitcoins, which at time of writing will be worth almost $200,000.

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Although its not nearly as cushy a deal as it sounds. There are a whole lot of mining nodes competing for this reward, and it's a question of luck and computing power (the further guessing calculations you can perform, the luckier you are).

Also, the expenses of being a mining node are considerable, not only due to the powerful 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 do), but also due to the large amounts of power that running these chips consumes. .

And, the number of all bitcoins given as a reward for solving the mystery will decrease. Its 12.5 now, but it halves every four decades or so (the next one is expected in 2020-21). The value of bitcoin relative to price of electricity and hardware could go up over the next few decades to partially compensate this reduction, but its not certain. .

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

Why 10 minutes That is the amount of time that the bitcoin developers page think is necessary for a steady and diminishing flow of browse around here new coins until the highest number of 21 million is reached (anticipated some time in 2140).

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