An Unbiased View of 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. But bitcoin isnt physical, so why do we call it mining
Because its similar to gold mining in the bitcoins exist in the protocols design (like the gold is underground), but they havent been brought out into the light yet (like the golden hasnt been awakened ). The bitcoin protocol stipulates that 21 million bitcoins will exist at some point.
They get to do so as a reward for creating blocks 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 to keep bitcoin running by participating in the relay of information. Anyone can run a node, you simply download the bitcoin software (totally 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 some nodes which it knows, who will relay the information to nodes 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 intricate mathematical puzzle that is a portion of the bitcoin app, and including the answer in the cube. The mystery that needs solving is to find a number that, when combined with all the information in the cube and passed through a hash function, produces a result that is within a certain range.
(For fiction fans, this number is called a nonce, which is a concatenation of number employed once. In the instance of bitcoin, the nonce is an integer between 0 and 4,294,967,296.)
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 use the hash function to the combination of that guessed number and the information in the cube. The resulting hash must start with a pre-established number of zeroes.
Whats more, there may be several nonces that produce the desired result, or there might be none (in the read more 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 victory to the remainder of the network. The rest of the miners immediately stop work on that block and begin trying to find out the mystery number for the next one. As a reward for the own work, the victorious miner gets some new bitcoin. .
In the time of writing, the payoff 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 fortune and computing power (the more guessing calculations you can execute, the luckier you're ).
Also, the expenses of being a mining node are considerable, not only due to the powerful hardware needed (if you've got a faster processor than your opponents, you've got a better chance of finding the correct number before they do), but also because of 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, but it halves every four years or so (the next one is expected in 2020-21). The worth of bitcoin relative to price of power and hardware could go up during the next few decades to partly compensate this reduction, but its not certain. .
The difficulty of the calculation (the required number of zeroes at the beginning of the hash string) is adjusted frequently, so it requires on average approximately 10 minutes to process a block.
Why 10 minutes That is the amount of time the bitcoin programmers think is necessary to get a continuous and diminishing flow of new coins until the highest number of 21 million is attained (anticipated some time in 2140).