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In 2009it was 50. In 2013, it was 25, at 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 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 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 need to confirm 1 megabyte (MB) value of transactions, which can technically 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 put in a block of transactions to the blockchain, miners must solve a intricate computational science difficulty, also referred to as a"proof of work" 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 all about 7,184,404,942,701. That is, the chance of a computer producing a hash below the goal is just 1 in 7,184,404,942,701 less than 1 in seven trillion. That amount is corrected every 2016 blocks, or roughly every 2 weeks, with the goal of keeping rates of mining constant.

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The reverse is also correct. If computational power has been taken off of this network, the difficulty adjusts downward to earn mining simpler. .

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"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 the number I'm thinking of.

"Let us say I am thinking about the number 19. If Friend A guesses 21they shed because 21>19. If Friend B guesses 16 and Friend C supposes find more info 12, then they have 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 closer to the goal answer of 19. .

"Now imagine I pose the'guess what number I am thinking of' question, however I'm not asking only three friends, and I'm 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 extremely difficult to guess the ideal answer." .

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

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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 can be performed competitively on normal desktop computers. As time passes, however, miners realized that graphics cards commonly used for video games were 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 it can only be done profitably with all the latest up-to-date ASICs. When using desktop computers, GPUs, or elderly versions of ASICs, the cost of energy consumption actually exceeds the revenue generated. Even with the newest unit at your disposal, one computer is seldom enough to compete with exactly what miners call"mining pools." .

A mining pool is a group of miners that combine their computing ability 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 odds, scaling difficulty levels, and also the huge network of users verifying transactions, one block of transactions is verified roughly every 10 minutes. However, 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 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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