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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 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 expensive for miners to make.

Here is the catch. In order to get bitcoin miners to really earn bitcoin from verifying transactions, two things must happen. To begin with, they need to confirm 1 megabyte (MB) value 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 shops.

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Second, in order to add a block of transactions to the blockchain, miners must solve a intricate computational science difficulty, also referred to as a"proof of labour " What they're doing is trying to come up with 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 all about 7,184,404,942,701. In other words, the chance of a computer producing a hash below the goal is 1 in 7,184,404,942,701 less than 1 in 7 trillion. That level is adjusted every 2016 blocks, or about every two weeks, with the goal of keeping rates of mining constant.

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The opposite is also correct. If computational power has been taken from this network, the difficulty adjusts downward to make 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 piece of paper and seal it in an envelope. My friends don't have to guess the specific number, they simply have to be the very first person to guess any number that is 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 21, they shed because 21>19. If Friend B guesses 16 and Friend C guesses 12, then they have both theoretically arrived 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 present the'guess what number I am thinking of' question, however 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 would-be 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 hard enough as is, here's the catch to the grab. Not only do bitcoin miners have to think of the ideal hash, but they also have to be the first to do it.

Because bitcoin mining is essentially guesswork, arriving at the ideal answer before another miner has everything to do with how fast your computer can create hashes. Just a decade ago, bitcoin miners could be carried out competitively on normal desktop computers. Over time, however, miners recognized that graphics cards commonly used 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 to the tens of thousands. .

Nowadays, bitcoin mining is so competitive that it can only be done profitably using the latest up-to-date ASICs. When using desktop computers, GPUs, or elderly models of ASICs, the expense of energy consumption actually surpasses 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" .

An mining pool is a group of miners who combine their computing ability and split 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 approximately 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 verified roughly every 10 minutes. But its important to remember that 10 minutes is a goal, not a rule.

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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 users continues to grow, but the number of transactions discover here made in 10 minutes will eventually exceed the number of transactions that can be processed in 10 minutes.