Getting My Cryptotrader Bot To Work
Instead, they 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. 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. But bitcoin isnt physical, so why do we call it mining
Since its like gold mining in the bitcoins exist in the protocols design (just as the gold exists underground), but they havent been brought out into the light yet (just as 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 cubes of validated 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 helps to keep bitcoin running by participating in the relay of information. Anyone can run a node, you simply 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 carries up about 145GB).
One node will send information to some nodes which it knows, who will relay the information to nodes they know, etc.. This way it ends up getting around the whole network pretty quickly. .
Some nodes are mining nodes (usually referred to as miners). These set outstanding transactions into blocks and add them into the blockchain. How do they do so by solving a intricate mathematical puzzle that is a portion of this bitcoin app, and including the answer in the block. The mystery that needs solving is to find a number which, when combined with all the information in the block and passed via a hash function, produces a result that is within a certain range.
(For trivia lovers, this number is called a nonce, which is a concatenation of number used once. In the instance 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 which makes it impossible to predict what the outcome will be. So, miners guess the mystery number and use the hash function to the combination of the guessed number and the data in the cube. The resulting hash has to begin with a pre-established number of zeroes.
Whats more, there might be several nonces that make 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 acquire 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 start trying to find out the puzzle number for your next one. As a reward for its work, the victorious miner gets some new bitcoin. .
At the time of writing, the reward is 12.5 bitcoins, which at time of writing is worth almost $200,000.
Though 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 luck and computing power (the more guessing calculations you can perform, the luckier try here you are).
Also, the costs of being a mining node are considerable, not only because of the powerful hardware needed (in case you've got a faster processor than your opponents, you've got a better chance of finding the right number before they do), 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, but it halves every four decades or so (the next one is anticipated 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 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 is the amount of time the bitcoin developers think is necessary for a steady and diminishing flow of new coins until the highest number of 21 million has been reached (expected some time in 2140).