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

At this rate of halving, the total 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 make.

Here's the catch. In order to get bitcoin miners to really earn bitcoin from verifying transactions, two things must occur. To begin with, they must verify 1 megabyte (MB) worth of transactions, which can technically be as little as 1 transaction but are more often several thousand, depending on how much information 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 math problem, also called a"proof of work." What they're doing is trying to think of a 64-digit hexadecimal number, known as a"hash," that's less than or equal to the target hash.

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In other words, it is a bet. .

The difficulty level of the most recent block at the time of writing is about 7,184,404,942,701. That is, the chance of a pc producing a hash beneath the target is just 1 in 7,184,404,942,701 less than 1 in 7 trillion. That amount is adjusted every 2016 blocks, or about every 2 weeks, with the goal of keeping rates of mining constant.

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The reverse is also correct. If computational power is taken off of the network, the difficulty adjusts downward to make mining easier. .

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

"Let us 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, because 16<19 and 12<19. There is no'extra credit' for Friend B, even though B's answer was closer to the target answer of 19. .

"Now imagine that I pose the'imagine what number I am thinking of' question, however I am not asking just three friends, and I am not thinking of a number between 1 and 100. Rather, I'm asking millions of prospective miners and I'm thinking of a 64-digit hexadecimal number. Now you see that it's going to be extremely look at here now difficult to guess the ideal answer." .

If 1 in seven trillion doesn't sound hard enough as is, here is the grab to the catch. Not only do bitcoin miners have to come up with the right hash, but they also must be the first to do it.

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

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

Nowadays, bitcoin mining is so aggressive that it can only be done profitably using all 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 at your disposal, one pc is rarely enough to compete with exactly what miners call"mining pools" .

A mining pool is a group of miners who combine their computing power and split the mined bitcoin between participants. A disproportionately high number of cubes are mined by pools rather than by individual miners. In July 2017, mining pools and companies represented approximately 80% to 90% 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. However, its important to remember that 10 minutes is a goal, not a guideline.

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