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In 2009it had been 50. In 2013, it had been 25, at 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 produce.

Here is the catch. In order to get bitcoin miners to actually earn bitcoin from verifying transactions, two things must occur. To begin with, they need to confirm 1 megabyte (MB) value of transactions, which can technically be as little as 1 transaction but are more often a few 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 should fix a complex computational science difficulty, also referred to as a"proof of work" What they're actually doing is trying to think of a 64-digit hexadecimal number, known as a"hash," that is less than or equal 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 below the target is just 1 in 7,184,404,942,701 less than 1 in seven trillion. That level is adjusted 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 correct. If computational power has been taken from the network, the problem adjusts downward to earn mining simpler. .

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"Say I tell three friends that I'm thinking of 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 have to guess the specific number, they just must be the very first person to figure any number that's 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 21they lose because 21>19. If Friend B supposes 16 and Friend C supposes 12, then they have 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 nearer to the goal answer of 19. .

"Now imagine I pose the'imagine what number I am his response thinking of' question, but I'm not asking only 3 friends, visit this website and I'm not thinking of a number between 1 and 100. Rather, I am asking millions of would-be miners and I'm thinking of a 64-digit hexadecimal number. Now you see that it is going to be quite hard to guess the right 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 come up with the ideal hash, they also have to be the very first to perform it.

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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. Just a decade ago, bitcoin miners could be carried out competitively on normal desktops. As time passes, however, miners realized 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.

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

Today, bitcoin mining is so competitive it can only be done profitably using the most up-to-date ASICs. When using desktop computers, GPUs, or elderly versions of ASICs, the cost of energy consumption actually exceeds the revenue generated. Even with the newest unit at your disposal, one computer is rarely enough to compete with exactly what miners call"mining pools." .

An mining pool is a group of miners that combine their computing power and split the mined bitcoin between participants. A disproportionately high number of cubes are mined by pools rather than by individual miners. In July 2017, about his mining pools and companies represented roughly 80% to 90 percent of bitcoin computing power. .

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Between 1 in 7 trillion odds, scaling difficulty levels, and the massive network of users 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 every 10 minutes. As 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.

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