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

Here is the catch. In order to get bitcoin miners to really earn bitcoin from verifying transactions, two things must occur. First, they must verify 1 megabyte (MB) worth of transactions, which can theoretically be as little 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 put in 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're actually doing is trying to think of a 64-digit hexadecimal number, called a"hash," that is 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 computer producing a hash below the target is 1 in 7,184,404,942,701 less than 1 in seven trillion. That amount is adjusted every 2016 blocks, or about every two weeks, with the goal of keeping rates of mining constant.

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The reverse is also true. If computational power has been taken from this network, the problem adjusts downward to make mining simpler. .

"Say I tell three friends 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 have to guess the exact number, they simply must be the very first person to guess any number that is less you can look here than or equal to the number I'm thinking of.

"Let's say I'm thinking about the number 19. If Friend A guesses 21they lose because 21>19. If Friend B guesses 16 and Friend C guesses 12, then they have both theoretically arrived at viable answers, since 16<19 and 12<19. There's no'extra credit' for Friend B, even though B's answer was nearer to the goal answer of 19. .

"Now imagine I pose the'guess what number I'm thinking click here now of' question, but I am not asking only 3 friends, and I am not thinking of a number between 1 and 100. Instead, I'm asking millions of would-be miners and I'm thinking about a 64-digit hexadecimal number. Now you see that it is going to be extremely difficult to guess the ideal answer." .

If 1 in 7 trillion doesn't sound difficult enough as is, here's the catch to the grab. Not only do bitcoin miners need to come up with the right hash, but they also have to be the first to do it.

Since bitcoin mining is essentially guesswork, arriving at the right answer before another miner has everything to do with how fast your computer can produce hashes. Only a decade ago, bitcoin miners can be performed competitively on normal desktops. Over time, 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 game.

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

Today, bitcoin mining is so aggressive it can only be done profitably with the most up-to-date ASICs. When using desktop computers, GPUs, or elderly versions of ASICs, the expense of energy consumption actually surpasses the revenue generated. Even with the newest unit available, one pc is seldom enough to compete with exactly what miners call"mining pools." .

A mining pool is a group of miners who combine their computing ability and divide the mined bitcoin between participants. A disproportionately high number of blocks redirected here 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 massive network of users verifying transactions, one block of transactions is confirmed roughly every 10 minutes. However, 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 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.