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In 2009it had been 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 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's the catch. In order to get bitcoin miners to really earn bitcoin from verifying transactions, two things have to happen. To begin with, they need to verify 1 megabyte (MB) value of transactions, which can technically be as small as 1 transaction but are more often a few 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 solve a complex computational science difficulty, also referred to as a"proof of work" What they're actually doing is trying to think of 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 gamble. .

The difficulty level of the most recent block at the time of writing is all about 7,184,404,942,701. In other words, the chance of a pc producing a hash beneath the goal is 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 aim of keeping rates of mining constant.

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

"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 have to be the first person to guess any number that's less than or equal to this number I'm thinking of.

"Let us say I'm thinking of the number 19. If Friend A guesses 21they lose because 21>19. If Friend B supposes 16 and Friend C supposes 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 target answer of 19. .

"Now imagine that I pose the'guess what number I am thinking of' question, however I'm not asking just 3 friends, and I'm not thinking of a number between 1 and 100. Rather, I am 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 hard to guess the right answer." .

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

Since bitcoin mining is essentially guesswork, arriving at the ideal answer before another miner has almost everything to do with how fast your computer can produce hashes. Just a decade ago, bitcoin miners could be performed competitively on normal desktop computers. As time passes, however, miners recognized that graphics cards commonly utilized for video games tend to be more capable of 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 the most up-to-date ASICs. When using desktop computers, GPUs, or older versions of ASICs, the expense of energy consumption actually exceeds the revenue generated. Even with the newest unit available, one computer is rarely enough to compete with exactly 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 roughly 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 consumers verifying transactions, one block of transactions is confirmed roughly every 10 minutes. However, its important to keep in mind that 10 minutes is a goal, 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 visit this page 10 minutes. As the network of bitcoin consumers continues to see this page grow, but the number of transactions made in 10 minutes will eventually exceed the number of transactions which can be processed in 10 minutes.