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Instead, they went with Solution 2. The resulting currency, called bitcoin money, increased the blocksize to 8 Mb in order to accelerate the verification process to permit 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 bitcoin mining, you envisage coins being dug out of the ground. However, bitcoin isnt bodily, so why do we call it mining
Since its similar to gold mining in the bitcoins exist in the protocols design (like the gold exists underground), but they havent been introduced into the light yet (like the gold hasnt yet been dug up). The bitcoin protocol stipulates that 21 million bitcoins will exist at some point.
They get to do 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 which 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 downside 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 that it knows, that will relay the information to nodes they know, etc.. This way it ends up getting around the entire network fairly fast. .
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 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 the information in the block and passed via a hash function, creates a result that is within a certain range.
(For trivia lovers, 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 predict what the outcome will be. So, miners suppose the mystery number and apply the hash function to the combination of the guessed number and also the information in the cube. The resulting hash has to start with a pre-established number of zeroes.
Whats more, there may be several nonces that make the intended result, or there may be none (in which case the miners keep trying, but with a different block configuration). .
The first miner to get a resulting hash within the desirable range announces its success to the remainder of the network. The rest of the miners immediately stop work on that block and begin trying to figure out the mystery number for your next one. As a reward for the work, the victorious miner has some new bitcoin. .
In the time of writing, the payoff is 12.5 bitcoins, which in 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 lot of mining nodes competing for this reward, and it is a question of fortune and computing power (the more guessing calculations you can execute, the luckier you're ).
And, the number of bitcoins given as a reward for solving the puzzle 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 price 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 corrected frequently, so that 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 maximum number of 21 million has been reached (expected some time in 2140).