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In 2009, it was 50. In 2013, it had been 25, in 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 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 to get bitcoin miners to actually earn bitcoin from verifying transactions, two things have to occur. First, they must verify 1 megabyte (MB) worth of transactions, which can theoretically be as small 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 add a block of transactions to the blockchain, miners should fix a complex computational math problem, also called a"proof of labour " What they're doing is trying to think of a 64-digit hexadecimal number, known as a"hash," that's less than or equal to the hash.

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In other words, it's a bet. .

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 pc producing a hash below the target is just 1 in 7,184,404,942,701 less than 1 in 7 trillion. That level is adjusted every 2016 blocks, or about every two weeks, with the aim of keeping rates of mining constant.

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The opposite is also true. If computational power is taken from the network, the difficulty adjusts downward to make mining simpler. .

"Say I tell three friends I'm thinking of a number between 1 and 100, and that I write that number on a piece of paper and seal it in an envelope. My friends don't have to guess the specific number, they simply have to be the very first person to figure any number that is less than or equal to the number I am thinking of.

"Let us say I'm thinking of 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 workable 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 present the'imagine what number I am thinking of' question, however I am not asking only 3 friends, and I am 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. Now you see that it is going to be extremely hard to guess the ideal answer." .

If 1 in 7 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 right hash, but they also have to be the first to perform it.

Since bitcoin mining is essentially guesswork, arriving at the ideal answer before another miner has everything to do with how fast your computer can produce hashes. Just a decade ago, bitcoin miners could be performed competitively on normal desktops. As time passes, however, miners recognized that pictures cards commonly used for video games were more capable of mining than desktops and graphics processing units (GPU) came to dominate the my explanation game.

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

Today, bitcoin mining is so competitive that it can only be done profitably using the latest up-to-date ASICs. When using desktop computers, GPUs, or elderly models of ASICs, the expense of energy consumption actually surpasses the revenue generated. Even with our website the newest unit Your Domain Name available, one computer is rarely enough to compete with exactly what miners call"mining pools." .

An mining pool is a group of miners who combine their computing ability and divide 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 roughly 80% to 90% of bitcoin computing power. .

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Between 1 in 7 trillion chances, scaling difficulty levels, and the massive network of users verifying transactions, one block of transactions is confirmed roughly every 10 minutes. But its important to keep in mind that 10 minutes is a goal, 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. Since the network of bitcoin users 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.