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

Here is the catch. In order for bitcoin miners to actually earn bitcoin from verifying transactions, two things must happen. To begin with, they must verify 1 megabyte (MB) worth of transactions, which can technically be as small 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 referred to as a"proof of work" What they are doing is trying to think of a 64-digit hexadecimal number, known as a"hash," that's less than or equivalent to the target 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 beneath the goal is just 1 in 7,184,404,942,701 less than 1 in seven 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 is taken from the network, the difficulty adjusts downward to earn mining easier. .

"Say I tell three friends I'm thinking about 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 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 about the number 19. If Friend A guesses 21they shed because 21>19. If Friend B supposes 16 and Friend C guesses 12, then they've both theoretically arrived at workable 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 I pose the'imagine what number I am thinking of' question, but I'm not asking only three friends, and I am not thinking of a number between 1 and 100. Instead, I'm asking millions of prospective miners and I am thinking of a 64-digit hexadecimal number. Now you see that it is going to be extremely difficult to guess the ideal answer." .

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

Since bitcoin mining is essentially guesswork, arriving at the ideal answer before another miner has almost everything to do with how fast your computer can create hashes. Only a decade ago, bitcoin miners can be carried out competitively on normal desktops. As time passes, however, miners recognized that graphics 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. .

Nowadays, bitcoin mining is so aggressive it can only be done profitably with the most up-to-date ASICs. When using desktop computers, GPUs, or older versions of ASICs, the expense of energy consumption actually exceeds 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 who 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 the massive network of consumers verifying transactions, one block of transactions is confirmed roughly every 10 minutes. But look here its important to remember that 10 minutes is a target, not a rule.

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