More About Free Bitcoin Mining Game
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 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
Because its like 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 gold hasnt been awakened ). 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 talk about nodes. A node is a powerful computer that runs the bitcoin software and assists 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 some nodes which it knows, who will relay the information to nodes that they know, etc.. This way it ends up getting around the whole network fairly fast. .
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's part of this bitcoin program, and including the answer in the block. The puzzle that needs solving is to find a number that, when combined with the information in the cube and passed via a hash function, creates a result that's within a certain range.
(For fiction fans, this number is known as a nonce, which can be a concatenation of number employed 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 which makes it impossible to predict exactly what the outcome will be. So, miners guess the puzzle number and apply the hash function to the combination of that guessed number and also the data in the cube. The resulting hash must begin with a pre-established number of zeroes.
Whats more, there might be several nonces that produce the desired result, or there may be none (in the event the miners keep trying, but with a different block configuration). .
The first miner to acquire a resulting hash within the desired range announces its success to the rest of the network. The rest of the miners immediately stop work on that block and start trying to find out the mystery number for your next one. As a reward for the work, the victorious miner gets some new bitcoin. .
In 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 this benefit, and it's a question of fortune and computing power (the more guessing calculations you can perform, the luckier you are).
Also, the costs of being a mining node are considerable, like it not only due to the effective hardware needed (in case you have a faster processor than your competitors, you have a better chance of finding the right number before they do), but also because of the large amounts of power that running these chips consumes. .
And, the number of all bitcoins awarded as a reward for solving the puzzle will decrease. Its 12.5 now, but 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 go up over the next few decades 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 adjusted 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 to get a continuous and diminishing flow of new coins until the maximum number of 21 million is attained (expected some time in 2140).