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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 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 precious over time but also more costly for miners to produce.

Here's the catch. In order for bitcoin miners to really earn bitcoin from verifying transactions, two things have to happen. First, they need to confirm 1 megabyte (MB) worth of transactions, which can technically be as little as 1 transaction but are far more often several thousand, depending on how much information each transaction stores.

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Second, in order to put in a block of transactions to the blockchain, miners should fix a complex computational math problem, also called a"proof of labour ." What they're actually doing is trying to think of a 64-digit hexadecimal number, called a"hash," that is 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 pc producing a hash beneath the target is 1 in 7,184,404,942,701 less than 1 in seven trillion. That level is corrected every 2016 blocks, or about every 2 weeks, with the goal of keeping rates of mining constant.

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The reverse is also true. If computational power has been taken from the network, the difficulty adjusts downward to earn mining easier. .

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

"Let's say I'm thinking about the number 19. If Friend A guesses 21, they lose because 21>19. If Friend B supposes 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 websites answer was closer to the target answer of 19. .

"Now imagine that I present the'guess what number I'm thinking of' question, but I am not asking only three friends, and I'm not thinking of a number between 1 and 100. Rather, I'm asking millions of prospective miners and I am thinking of a 64-digit hexadecimal number. Now you see that it's 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 grab to the grab. Not only do bitcoin miners have to think of the ideal hash, they also have to be the first to do it.

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

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

Today, bitcoin mining is so competitive it can only be done profitably using the most up-to-date ASICs. When using desktop navigate to these guys computers, GPUs, or older versions of ASICs, the cost of energy consumption actually exceeds the revenue generated. Even with the newest unit available, one computer is rarely enough to compete with what what miners call"mining pools" .

An mining pool is a group of miners who combine their computing power and divide the mined bitcoin between participants. A disproportionately high number of blocks are mined by pools rather than by individual miners. In July 2017, mining pools and companies represented roughly best site 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 verified roughly every 10 minutes. But its important to remember 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, but the number of transactions made in 10 minutes will eventually exceed the number of transactions that can be processed in 10 minutes.