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In 2009it had been 50. In 2013, it had been 25, in the time of writing it is 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 precious over time but also more expensive for miners to produce.

Here's the catch. In order for bitcoin miners to really earn bitcoin from verifying transactions, two things must happen. First, they must confirm 1 megabyte (MB) worth of transactions, which can technically be as little as 1 transaction but are more often several thousand, depending on how much data each transaction stores.

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Second, in order to put in a block of transactions to the blockchain, miners must solve a complex computational science difficulty, also called a"proof of work" What they are doing is trying to come up with a 64-digit hexadecimal number, called a"hash," that is less than or equal to the target hash.

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In other words, it is a bet. .

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 just 1 in 7,184,404,942,701 less than 1 in 7 trillion. That level is corrected every 2016 cubes, or about every 2 weeks, with the aim of keeping rates of mining constant.

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The reverse is also true. If computational power is taken off of the network, the difficulty adjusts downward to make mining simpler. .

"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 have to guess the specific number, they just have to be the very first person to figure any number that is less than or equal to this number I am thinking of.

"Let us say I am thinking of the number 19. If Friend A guesses 21they lose because 21>19. If Friend B supposes my latest blog post 16 and Friend C guesses 12, then they've both theoretically arrived at workable answers, because 16<19 and 12<19. There's 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 am not asking just 3 friends, and I am not thinking of a number between 1 and 100. Instead, I am asking millions of would-be miners and I am thinking about a 64-digit hexadecimal number. 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 grab to the grab. Not only do bitcoin miners need to come up with the ideal hash, they also must be the very first to perform 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 create hashes. Just a decade ago, bitcoin miners can be performed competitively on normal desktop computers. Over time, however, miners recognized that graphics cards commonly used for video games were 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 into the tens of thousands. .

Today, bitcoin mining is so aggressive it can only be done profitably using the most up-to-date ASICs. When using desktop computers, GPUs, or elderly models 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" .

A mining pool is a group of miners who combine their computing power and split the mined bitcoin between participants. A disproportionately large number of cubes are mined by pools try these out 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 odds, scaling difficulty levels, and the massive network of consumers verifying transactions, one block of transactions is confirmed roughly every 10 minutes. But its important to keep in mind that 10 minutes is a target, not a rule.

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The bitcoin network can process about seven transactions per second, with transactions being logged in the blockchain each 10 minutes. As the network of bitcoin consumers continues to grow, but the number of transactions made in 10 minutes will eventually exceed useful content the number of transactions which can be processed in 10 minutes.