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In 2009, it had been 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 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 expensive for miners to make.

Here is the catch. In order for bitcoin miners to really earn bitcoin from verifying transactions, two things must happen. First, they need to confirm 1 megabyte (MB) value of transactions, which can theoretically be as small as 1 transaction but are far more often several thousand, depending on how much information each transaction shops.

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Second, in order to put in a block of transactions to the blockchain, miners must fix a complex computational science difficulty, also called a"proof of work" What they are 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 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 goal is just 1 in 7,184,404,942,701 less than 1 in 7 trillion. That level is adjusted every 2016 cubes, or about every 2 weeks, with the goal of keeping rates of mining constant.

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The opposite is also true. If computational power has been taken from this 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 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 other simply must be the first person to guess any number that's less than or equal to this number I am thinking of.

"Let's say I am 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 have both theoretically arrived 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'imagine what number I am thinking of' question, but I am not asking only 3 friends, and I'm not thinking of a number between 1 and 100. Rather, I am asking millions of would-be miners and I'm thinking about a 64-digit hexadecimal number. Now you see that it's going to be extremely hard to guess the ideal answer." .

If 1 in seven trillion doesn't sound hard enough as is, here's the catch to the grab. Not only do bitcoin miners have to come up with the ideal hash, 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 produce hashes. Only a decade ago, bitcoin miners could be performed competitively on normal desktops. Over time, however, miners recognized that graphics cards commonly utilized for video games were 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 into the tens of thousands. .

Nowadays, bitcoin mining is so competitive it can only be done profitably using all the latest up-to-date ASICs. When using desktop computers, GPUs, or older models of ASICs, the expense 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" .

An visit 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 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 confirmed 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 which can be processed in 10 minutes.

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