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In 2009, it was 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 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 expensive for miners to produce.

Here's the catch. In order to get bitcoin miners to actually earn bitcoin from verifying transactions, two things have to occur. To begin with, they must verify 1 megabyte (MB) value 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 stores.

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Second, in order to add a block of transactions to the blockchain, miners must solve a complex computational math problem, also referred to as a"proof of labour " What they are actually 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's a gamble. .

The difficulty level of the most recent block at the time of writing is all about 7,184,404,942,701. That is, 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 level is adjusted every 2016 blocks, or about every 2 weeks, with the goal of keeping rates of mining constant.

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The opposite is also true. If computational power is taken off of this network, the problem adjusts downward to earn mining simpler. .

"Say I tell three friends that 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 must this be the first person to guess any number that is less than or equal to this number I am thinking of.

"Let's say I'm thinking about the number 19. If Friend A guesses 21they shed because 21>19. If Friend B guesses 16 and Friend C guesses 12, then they've both technically came at viable answers, because 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 that I pose the'guess 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. Rather, I am asking millions of prospective miners and I'm thinking about a 64-digit hexadecimal number. Now you see that it's going to be extremely hard to guess the ideal my site answer." .

If 1 in 7 trillion doesn't sound difficult enough as is, here is the catch to the grab. Not only do bitcoin miners need to think of the ideal hash, but they also have to be the very 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 performed competitively on normal desktop computers. As time passes, however, miners realized that graphics cards commonly utilized for video games were 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 into the tens of thousands. .

Today, bitcoin mining is so competitive that it find this can only be done profitably using the latest up-to-date ASICs. When using desktop computers, GPUs, or older versions of ASICs, the cost of energy consumption actually surpasses the revenue generated. Even with the newest unit available, one pc is rarely enough to compete with what what miners call"mining pools" .

An mining pool is a group of miners that combine their computing ability 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, mining pools and companies represented approximately 80% to 90% of bitcoin computing power. .

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Between 1 in 7 trillion chances, scaling difficulty levels, and the huge 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 goal, 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 which can be processed in 10 minutes.