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In 2009, it 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 speed 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 is the catch. In order to get bitcoin miners to actually earn bitcoin from verifying transactions, two things have to happen. First, they must verify 1 megabyte (MB) value of transactions, which can theoretically be as small as 1 transaction but are more often a few thousand, depending on how much data each transaction shops.

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Second, in order to add a block of transactions to the blockchain, miners must solve a intricate computational math problem, also referred to as a"proof of work." What they are doing is trying to come up with a 64-digit hexadecimal number, known as a"hash," that's less than or equivalent to the hash.

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In other words, it's a gamble. .

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 below the goal is 1 in 7,184,404,942,701 less than 1 in seven trillion. That level is corrected every 2016 blocks, or roughly every two weeks, with the aim of keeping rates of mining constant.

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The opposite 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 of a number between 1 and 100, and I write that number on a sheet of paper and seal it in an envelope. My friends don't need to guess the exact number, they just must be the first person to figure any number that is Continued less than or equal to the number I am thinking of.

"Let's say I'm thinking about the number 19. If Friend A guesses 21they shed because 21>19. If Friend B guesses 16 and Friend C supposes 12, then they've both theoretically arrived at viable answers, since 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'guess what number I am thinking of' question, however I'm not asking just three friends, and I'm not thinking of a number between 1 and 100. Instead, I am asking millions of prospective miners and I am thinking of a 64-digit hexadecimal number. Now you see that it's going to be extremely hard to guess the right answer." .

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

Because bitcoin mining is essentially guesswork, arriving at the right answer before another miner has almost everything to do with how fast your computer can create hashes. Only a decade ago, bitcoin miners could be carried out competitively on normal desktops. Over time, however, miners recognized that graphics cards commonly utilized for video games tend to be more effective at 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 that it can only be done profitably using all the latest up-to-date ASICs. When using desktop computers, GPUs, or elderly versions of ASICs, the expense of energy consumption actually surpasses click the revenue generated. Even with the newest unit at your disposal, one pc is seldom enough to compete with what what miners call"mining pools" .

A mining pool is a group of miners that combine their computing ability 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 also the huge network of consumers verifying transactions, one block of transactions is confirmed roughly every 10 minutes. But its important to keep in mind 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 every 10 minutes. Since the network of bitcoin users 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.