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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 allow a performance of around two million transactions per 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. However, bitcoin isnt bodily, so why do we call it mining

Because its similar to gold mining in the bitcoins exist in the protocols design (just as the gold exists underground), but they havent been introduced into the mild yet (like the gold hasnt yet been awakened ). 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 validated transactions and including them in the blockchain.

Backtracking a bit, lets discuss nodes. A node is a powerful computer which runs the bitcoin applications and helps keep bitcoin running by participating in the relay of information. Anyone can run a node, you just download the bitcoin applications (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 some nodes which it knows, that will relay the information to nodes they know, etc.. This way it ends up getting around the whole network fairly fast. .

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

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(For fiction fans, this number is known as a nonce, which is 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 outcome will be. So, miners guess the mystery number and use the hash function to the combination of that guessed number and the data in the cube. The resulting hash must begin with a pre-established number of zeroes.

Whats more, there might be several nonces that make the desired result, or there may be none (in the event the miners keep trying, but using a different block configuration). .

The first miner to get a resulting hash within the desired range announces its success to the remainder of the network. All the other 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 reward is 12.5 bitcoins, which in time of writing is worth nearly $200,000.

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

Additionally, the expenses of being a mining node are considerable, not only due to the powerful hardware needed (if you have a faster processor than your competitors, you have a better chance of finding the right number before they perform ), but also due to the large amounts of power that running these processors consumes. .

And, the number of bitcoins awarded as a reward for solving the mystery will decrease. Its 12.5 now, however, it pits each four decades or so (the next one is expected in 2020-21). The value of bitcoin relative to cost of electricity and hardware could go up over the next few years to partly compensate this reduction, but its not certain. click here for more .

The problem of the calculation (the required number of zeroes at the beginning of the hash string) is adjusted frequently, so it takes 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 continuous and diminishing flow of new coins until the maximum number of 21 million is attained (anticipated some time in 2140).

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