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In 2009, it had been 50. In 2013, it had been 25, in the time of writing it is 12.5, and sometime in the middle of 2020 it will halve to 6.25. .

At this speed of halving, the entire 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 make.

Here is the catch. In order for bitcoin miners to really earn bitcoin from verifying transactions, two things must occur. First, they need to confirm 1 megabyte (MB) worth of transactions, which can theoretically be as little as 1 transaction but are more often several thousand, depending on how much information each transaction shops.

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Second, in order to add a block of transactions to the blockchain, miners should fix a intricate computational math problem, also referred to as a"proof of work." What they are actually doing is trying to think of a 64-digit hexadecimal number, called 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 level is corrected every 2016 cubes, or roughly every 2 weeks, with the aim 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 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 need to guess the specific number, they just must 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 am 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, because 16<19 and 12<19. There's no'extra credit' for Friend B, even though B's answer was nearer to the target answer of 19. .

"Now imagine I pose the'imagine what number I am thinking of' question, however I am not asking just three 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 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 seven trillion doesn't sound hard enough as is, here is the grab to the grab. Not only do bitcoin miners have to come up with the ideal hash, but they also must be the first to perform it.

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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. Only a decade ago, bitcoin miners could be carried out moved here competitively on normal desktops. As time passes, however, miners realized that graphics cards commonly used for video games tend to be more effective at 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. .

Nowadays, bitcoin mining is so competitive that it can only be done profitably with all the most up-to-date ASICs. When using desktop computers, GPUs, or elderly versions of ASICs, the expense of energy consumption actually exceeds 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 who 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 also the huge network of users verifying transactions, one block of transactions is verified 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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