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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 center 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 expensive for miners to make.

Here is the catch. In order to get bitcoin miners to really 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 shops.

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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 referred to as a"proof of labour ." What they are 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 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 computer producing a hash below the goal is just 1 in 7,184,404,942,701 less than 1 in 7 trillion. That amount is adjusted every 2016 blocks, or about every two 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 this network, the problem adjusts downward to make mining easier. .

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"Say I tell three friends 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 exact number, they simply have to be the very first person to figure any number that's less than or equal to the number I'm thinking of.

"Let us 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 technically came at workable answers, because 16<19 and 12<19. There's no'extra credit' for Friend B, even though B's my site answer was closer to the goal answer of 19. .

"Now imagine I present the'guess what number I'm thinking of' question, however I'm not asking only three friends, and I am not thinking of a number between 1 and 100. Instead, I'm asking millions of prospective miners and I'm thinking about a 64-digit hexadecimal number. Now you see that it is going to be quite hard to guess the right answer." .

If 1 in 7 trillion doesn't sound hard enough as is, here's the catch to the grab. Not only do bitcoin miners need to think of the right hash, they also must be the very first to do it.

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Since bitcoin mining is essentially guesswork, arriving at the ideal answer before another miner has almost everything to do with how fast your computer can create hashes. Just a decade ago, bitcoin miners can be performed competitively on normal desktops. Over time, however, miners realized that pictures cards commonly used for video games tend to be more effective at 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. .

Nowadays, bitcoin mining is so aggressive that it can only be done profitably using all the latest up-to-date ASICs. When using desktop computers, GPUs, or elderly models of ASICs, the cost of energy consumption actually surpasses the revenue Continued generated. Even with the newest unit available, one pc is rarely next enough to compete with exactly what miners call"mining pools" .

An mining pool is a group of miners who 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, mining pools and companies represented roughly 80% to 90 percent of bitcoin computing power. .

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Between 1 in 7 trillion chances, scaling difficulty levels, and also the huge 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 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 users continues to grow, however, the number of transactions made in 10 minutes will eventually exceed the number of transactions that can be processed in 10 minutes.

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