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In 2009, it was 50. In 2013, it had been 25, in the time of writing it's 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 verify 1 megabyte (MB) worth of transactions, which can technically be as small as 1 transaction but are far more often a few thousand, depending on how much data each transaction stores.

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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 come up with a 64-digit hexadecimal number, called a"hash," that's less than or equivalent to the hash.

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In other words, it's 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 pc producing a hash beneath the target is 1 in 7,184,404,942,701 less than 1 in 7 trillion. That amount is adjusted every 2016 cubes, or roughly every 2 weeks, with the goal of keeping rates of mining constant.

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

"Say I tell three friends that I'm thinking of 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 specific number, they just must be the first person to guess any number that is less than or equal to the number I'm thinking of.

"Let us say I am thinking of 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 viable answers, since 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 present the'imagine what number I am thinking of' question, however I am not asking just 3 friends, and I am not thinking of a number between 1 and 100. Instead, I am asking millions of prospective miners and I am basics 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 seven trillion doesn't sound hard enough as is, here is the catch to the grab. Not only do bitcoin miners need to think of the ideal hash, they also must be the very first to perform it.

Since bitcoin mining is essentially guesswork, arriving at the right answer before another miner has almost everything to do with how fast your computer can create hashes. Only a decade ago, bitcoin miners could be performed competitively on normal desktops. Over time, however, miners recognized that pictures 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 competitive it can only be done profitably using the most up-to-date ASICs. When using desktop computers, GPUs, or older models of ASICs, the cost of energy consumption actually exceeds 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" .

A mining pool is a group of miners who 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 odds, scaling difficulty levels, and also the massive network of consumers verifying transactions, one block of transactions is verified roughly every 10 minutes. But its important to remember that 10 minutes is a goal, 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 consumers 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.