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In 2009, it was 50. In 2013, it was 25, at 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 expensive for miners to make.

Here's the catch. In order for bitcoin miners to actually earn bitcoin from verifying transactions, two things must happen. First, they must confirm 1 megabyte (MB) value of transactions, which can technically be as little as 1 transaction but are far more often several 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 solve a complex computational math problem, also referred to as a"proof of labour ." What they are doing is trying to come up with a 64-digit hexadecimal number, known as a"hash," that is less than or equivalent to the target 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 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 adjusted every 2016 blocks, or roughly every two weeks, with the goal of keeping rates of mining constant.

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The opposite is also correct. If computational power is taken from the network, the difficulty adjusts downward to earn mining easier. .

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"Say I tell three friends I'm thinking about a number between 1 and 100, and that I write that number on a piece of paper and seal it in an envelope. My friends don't have to guess the exact number, they just have to be the first person to guess 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 21, they lose because 21>19. If Friend B guesses 16 and Friend C guesses 12, then they've both technically came at viable 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 I pose the'guess what number I'm thinking of' question, but I am not asking only 3 friends, and I am not thinking of a number between 1 and 100. Instead, I am asking millions of prospective miners and I'm thinking of a 64-digit hexadecimal number. Now you see that it is going to be quite difficult to guess the right answer." .

If 1 in 7 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 have to be the very 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 produce hashes. Only a decade ago, bitcoin miners could be performed competitively on normal desktop computers. As time passes, however, miners realized that pictures cards commonly utilized 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 to the tens of thousands. .

Today, bitcoin mining is so aggressive it can only be done profitably using all the most up-to-date ASICs. When using desktop computers, advice GPUs, or older models of ASICs, the cost of energy consumption actually surpasses the revenue generated. Even with the newest unit available, one pc is rarely enough More hints to compete with what what miners call"mining pools" .

A mining pool is a group of miners that 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 80% to 90 percent of bitcoin computing power. .

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Between 1 in 7 trillion chances, scaling difficulty levels, and the massive network of consumers 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 each 10 minutes. As the network of bitcoin consumers continues to grow, however, the number of transactions made in 10 minutes will eventually exceed the number of transactions which can be processed in 10 minutes.

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