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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 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 bitcoin mining, you envisage coins being dug out of the ground. However, bitcoin isnt physical, so why do we call it mining

Because its similar to gold mining in that the bitcoins exist in the protocols design (like 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 cubes of confirmed transactions and including them in the blockchain.

Backtracking a bit, lets talk about nodes. A node is a powerful computer that 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 (free) and leave a certain port open (the drawback is that it consumes energy and storage space the network at time of writing carries up about 145GB).

One node will send information to a few nodes that it knows, who will relay the information to nodes that they know, etc.. That way it ends up getting around the entire network fairly quickly. .

Some nodes are mining nodes (usually referred to as miners). These set outstanding transactions into cubes and add them into the blockchain. How do they do this By solving a complex mathematical mystery that's a portion of the bitcoin program, and including the answer in the cube. 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's within a certain range.

(For fiction fans, this number is called a nonce, which can be a concatenation of number used once. In the instance of bitcoin, the nonce is an integer between 0 and 4,294,967,296.)

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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 suppose the puzzle number and apply the hash function to the combination of that guessed number and also the information in the block. The resulting hash has to read review 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 which case the miners keep trying, but visit the website with a different block configuration). .

The first miner to get a resulting hash within the desirable range announces its success to the rest of the network. All the other miners immediately stop work on that block and start trying to figure out the mystery number for your next one. As a reward for its work, the victorious miner has 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 bargain as it sounds. There are a lot of mining nodes competing for this benefit, and it is a question of luck and computing power (the further guessing calculations you can perform, the luckier you are).

Additionally, the expenses of being a mining node are considerable, not only due to the effective hardware needed (if you have a faster processor than your opponents, 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 puzzle will decrease. Its 12.5 now, however, 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 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 corrected frequently, so that it takes on average about 10 minutes to process a block.

Why 10 minutes that's the amount of time that the bitcoin developers think is necessary to get a steady and diminishing flow of new coins until the maximum number of 21 million is reached (anticipated some time in 2140).