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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 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 about bitcoin mining, you envisage coins being dug from the ground. But bitcoin isnt bodily, so why do we call it mining
Since 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 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 validated 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 helps to keep bitcoin running by participating in the relay of information. Anyone can run a node, you just download the bitcoin software (free) and also leave a certain port open (the downside is the fact 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 that it knows, who 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 this By solving a complex mathematical puzzle that is 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 all the information in the block and passed through a hash function, produces a result that is within a certain range.
How can they find this number By guessing at random. The hash function which makes it impossible to forecast exactly what the outcome will be. So, miners check this guess the puzzle number and apply the hash function to the combination of that guessed number and also the data in the block. The resulting hash must start 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 using 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 cease work on that block and start trying to find out the mystery number for your next one. As a reward for its own work, the victorious miner gets some new bitcoin. .
At the time of writing, the reward is 12.5 bitcoins, which in time of writing is worth nearly $200,000.
Also, the costs of being a mining node are considerable, not only due to the effective hardware needed (in case you have 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 bitcoins awarded 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 cost of electricity and hardware could go up over the next few decades to partly 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 about 10 minutes to process a block.
Why 10 minutes that's the amount of time that the bitcoin developers think is necessary for a steady and diminishing flow of new coins until the maximum number of 21 million is reached (expected some time in 2140).