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In 2009it had been 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 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 costly for miners to produce.

Here is the catch. In order to get bitcoin miners to really earn bitcoin from verifying transactions, two things must happen. To begin with, they must confirm 1 megabyte (MB) value of transactions, which can technically be as small 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 solve a intricate computational math problem, also called a"proof of work." What they're doing is trying to think of a 64-digit hexadecimal number, called a"hash," that's less than or equivalent 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. In other words, the chance of a pc producing a hash below the goal is just 1 in 7,184,404,942,701 less than 1 in seven trillion. That level is corrected every 2016 cubes, or about every two weeks, with the aim of keeping rates of mining constant.

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The opposite is also correct. If computational power is taken off of this network, the problem adjusts downward to make mining easier. .

"Say I tell three friends 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 need to guess the specific number, they simply have to be the very first person to figure any number that's less than or equal to this 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 supposes 16 and Friend C supposes 12, then they've both theoretically arrived at workable answers, because 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 that I pose the'imagine pop over here what number I am thinking of' question, but I am not asking only three friends, and I'm not thinking of a number between 1 and 100. Instead, I am asking millions of would-be miners and I'm thinking about a 64-digit hexadecimal number. Now you see that it is going to be quite difficult to guess the ideal answer." .

If 1 in 7 trillion doesn't sound difficult enough as is, here is the catch to the catch. Not only do bitcoin miners need to come up with the right hash, they also have to be the first to perform it.

Because 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 could be carried out competitively on normal desktop computers. As time passes, however, miners realized that pictures cards commonly utilized 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 to the tens of thousands. .

Today, bitcoin mining is so aggressive it can only be done profitably with all the most up-to-date ASICs. When using desktop computers, GPUs, or older models of ASICs, the expense of energy consumption actually surpasses 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 large number of cubes are mined by pools 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 chances, scaling difficulty levels, and also the massive 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 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. 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.