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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 per day. In 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

Since its like gold mining in the bitcoins exist in the protocols design (like the gold exists underground), but they havent been introduced into the light yet (just as the golden hasnt been dug up). The bitcoin protocol stipulates that 21 million bitcoins will exist at some point.

They get to perform so as a reward for creating cubes of confirmed transactions and including them in the blockchain.

Backtracking a bit, lets discuss nodes. A node is a powerful computer that runs the bitcoin software and helps keep bitcoin running by participating in the relay of information. Anyone can run a node, you just download the bitcoin software (totally 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 a few nodes which it knows, that 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 cubes and add them to the blockchain. How do they do so by solving a complex mathematical mystery that's part of this bitcoin program, and including the answer in the block. The puzzle that needs solving is to find a number which, when combined with the information in the block and passed via a hash function, creates a result that is 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 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 mystery anonymous number and use the hash function to the combination of that guessed number and the information in the block. The resulting hash has to begin with a pre-established number of zeroes.

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

The first miner to get a resulting hash within the desired range announces its victory to the remainder of the network. All the other miners immediately cease work on that block and begin trying to find out the mystery number for the next one. As a reward for the work, the victorious miner gets some new bitcoin. .

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

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Although its not nearly as cushy a bargain as it sounds. There are a whole lot of mining nodes competing for that reward, and it is a question of fortune and computing power (the more guessing calculations you can perform, the luckier you're ).

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 have a better chance of finding the correct 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 mystery will decrease. Its 12.5 now, but it pits each four decades or so (the next one is expected in 2020-21). The worth of bitcoin relative to price of electricity and hardware could extend up during the next few years to partially 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 it takes on average approximately 10 minutes to process a block.

Why 10 minutes that's the amount of time that the bitcoin developers think is necessary for a continuous and diminishing flow of new coins until the highest number of 21 million has been attained (expected some time in 2140).

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