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In 2009it was 50. In 2013, it had been 25, in the time of writing it is 12.5, and sometime in the middle of 2020 it will halve to 6.25. .

At this speed of halving, the entire number of bitcoin in circulation will approach a limit of 21 million, making the currency more scarce and precious over time but also more costly for miners to produce.

Here is the catch. In order to get bitcoin miners to actually earn bitcoin from verifying transactions, two things have to occur. To begin with, they must verify 1 megabyte (MB) value of transactions, which can theoretically be as small as 1 transaction but are more often several thousand, depending on how much data each transaction stores.

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Second, in order to put in a block of transactions to the blockchain, miners should fix a intricate computational science difficulty, also referred to as a"proof of work." What they're actually doing is trying to think of a 64-digit hexadecimal number, called a"hash," that's less than or equivalent to the hash.

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In other words, it's a bet. .

The difficulty level of the most recent block at the time of writing is all about 7,184,404,942,701. In other words, the chance of a pc producing a hash below the target is 1 in 7,184,404,942,701 less than 1 in 7 trillion. That level is adjusted every 2016 cubes, or roughly every two weeks, with the aim of keeping rates of mining constant.

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The reverse is also correct. If computational power has been taken from this network, the problem adjusts downward to earn mining easier. .

"Say I tell three friends I'm thinking about a number between 1 and 100, and that I write that number on a sheet of paper and seal it in an envelope. My friends don't have to guess the exact number, they simply have to be the first person to figure any number that's less than or equal to the number I am thinking of.

"Let us say I am thinking about the number 19. If Friend A guesses 21they shed because 21>19. If Friend B guesses 16 and Friend C guesses 12, then they've both theoretically arrived at workable answers, because 16<19 and 12<19. There is no'extra credit' for Friend B, even though B's answer was nearer to the goal answer of 19. .

"Now imagine that I present the'guess what number I'm thinking of' question, but I'm not asking just 3 friends, and I'm not thinking of a number between 1 and 100. Rather, I'm asking millions of prospective miners and I am thinking of a 64-digit hexadecimal number. Now you their website see that it's going to be extremely difficult to guess the ideal answer." .

If 1 in seven trillion doesn't sound hard enough as is, here's the catch to the catch. Not only do bitcoin miners need to think of the right hash, but they also must be the first to do it.

Because bitcoin mining is essentially guesswork, arriving at the right answer before another miner has everything to do with how fast your computer can produce hashes. Only a decade ago, bitcoin miners could be carried out competitively on normal desktop computers. Over time, however, miners recognized that graphics cards commonly utilized for video games were more capable of mining than desktops and graphics processing units (GPU) came to dominate the match.

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These can run from $500 into the tens of thousands. .

Nowadays, bitcoin mining is so competitive it can only be done profitably with the most up-to-date ASICs. When using desktop computers, GPUs, or older models of ASICs, the expense of energy consumption actually exceeds the revenue generated. Even with the newest unit available, one pc is rarely enough to compete with exactly what miners call"mining pools" .

A mining pool is a group of miners that combine their computing ability and divide the mined bitcoin between participants. A disproportionately high number of blocks are mined by pools rather than by individual miners. In July 2017, mining pools and companies represented roughly 80% to 90% of bitcoin computing power. .

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Between 1 in 7 trillion odds, scaling difficulty levels, and also the huge network of users verifying transactions, one block of transactions is confirmed roughly every 10 minutes. But its important to keep in mind that 10 minutes is a target, not a rule.

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The bitcoin network can process about seven transactions per second, with transactions being logged in the blockchain every 10 minutes. As the network of bitcoin consumers continues to grow, but the number of transactions made in 10 minutes will eventually exceed the number of transactions that can be processed in 10 minutes.