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In 2009, it was 50. In 2013, it was 25, at the time of writing it is 12.5, and sometime in the center 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's the catch. In order for bitcoin miners to actually earn bitcoin from verifying transactions, two things have to occur. To begin with, they need to verify 1 megabyte (MB) worth of transactions, which can technically be as little as 1 transaction but are far more often several thousand, depending on how much data each transaction stores.

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Second, in order to add a block of transactions to the blockchain, miners must 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 equal 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 about 7,184,404,942,701. In other words, the chance of a pc producing a hash beneath the goal is just 1 in 7,184,404,942,701 less than 1 in 7 trillion. That amount is corrected every 2016 cubes, or about every two weeks, with the goal of keeping rates of mining constant.

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The reverse is also true. If computational power has been taken off of this network, the difficulty adjusts downward to earn mining easier. .

"Say I tell three friends that 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 very first person to guess any number that's less than or equal to this number I'm thinking of.

"Let's say I am thinking of the number 19. If Friend A guesses 21they lose because 21>19. If Friend B supposes 16 and Friend C guesses 12, then they've both technically came at viable answers, since 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'imagine what number I am thinking of' question, however I'm not asking just 3 friends, and I am 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 see that it's going to be quite hard to guess the ideal answer." .

If 1 in 7 trillion doesn't sound hard enough as is, here is the grab to the grab. Not only do bitcoin miners need to come up with the right hash, they also must be the first to perform 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 create hashes. Just a decade ago, bitcoin miners can be carried out competitively on normal desktop computers. Over time, however, miners recognized that graphics address cards commonly used for video games tend to be 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 to the tens of thousands. .

Today, bitcoin mining is so aggressive it can only be done profitably with all the most up-to-date ASICs. When using desktop computers, GPUs, or older versions of ASICs, the cost of energy consumption actually surpasses the revenue generated. Even with the newest unit at your disposal, one computer is seldom enough to compete with what what miners call"mining pools" .

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

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Between 1 in 7 trillion chances, scaling difficulty levels, and the huge network of consumers verifying transactions, one block of transactions is verified 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 this logged in the blockchain each 10 minutes. As the network of bitcoin users continues to grow, however, the number of transactions made in 10 minutes will eventually exceed the number of transactions that can be processed in 10 minutes.