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In 2009it was 50. In 2013, it was 25, at the time of writing it is 12.5, and sometime in the middle 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 valuable over time but also more costly for miners to produce.

Here is the catch. In order for bitcoin miners to really earn bitcoin from verifying transactions, two things must occur. To begin with, they need to verify 1 megabyte (MB) worth 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 fix a intricate computational science difficulty, also referred to as a"proof of work" What they're actually doing is trying to come up with a 64-digit hexadecimal number, known as a"hash," that is less than or equal 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 beneath the target is 1 in 7,184,404,942,701 less than 1 in seven trillion. That level is corrected every 2016 cubes, or roughly every 2 weeks, with the aim of keeping rates of mining constant.

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The opposite is also correct. If computational power has been taken off of this network, the problem adjusts downward to earn 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 sheet of paper and seal it in an envelope. My friends don't need to guess the specific number, they just must be the very first person to figure any number that is less than or equal to the number I'm thinking of.

"Let's say I am thinking about the number 19. If Friend A guesses 21, they shed because 21>19. If Friend B supposes 16 and Friend C guesses 12, then they have both technically came at workable answers, because 16<19 and 12<19. There is no'extra credit' for Friend B, even though B's answer was closer to the goal answer of 19. .

"Now imagine that I pose the'guess what number I'm thinking of' question, but I am not asking just three friends, and I'm not thinking of a number between 1 and 100. Rather, I am asking millions of prospective miners and I am thinking of a 64-digit hexadecimal number. more 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 is the catch to the grab. Not only do bitcoin miners need to think of the ideal hash, they also have to be the first to perform it.

Since bitcoin mining is essentially guesswork, arriving at the right answer before another miner has almost everything to do with how fast your computer can produce hashes. Just a decade ago, bitcoin miners can be carried out competitively on normal desktop computers. As time passes, however, miners recognized that pictures cards commonly used 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 competitive that it can only be done profitably with all the latest up-to-date ASICs. When using desktop computers, GPUs, or elderly versions of ASICs, the cost of energy consumption actually surpasses the revenue generated. Even with the newest unit available, one computer is rarely enough to compete with what what miners call"mining pools" .

A mining pool is a group of miners that combine their computing ability and divide 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 remember that 10 minutes is a target, 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 that can be processed in 10 minutes.