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In 2009it 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 rate of halving, the total number of bitcoin in circulation will approach a limit of 21 million, making the currency more scarce and valuable over time but also more costly for miners to make.

Here is the catch. In order for bitcoin miners to actually earn bitcoin from verifying transactions, two things must happen. To begin with, they must confirm 1 megabyte (MB) value of transactions, which can technically be as small 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 put in a block of transactions to the blockchain, miners must fix a intricate computational math problem, also referred to as 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 equal to the hash.

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In other words, it is a gamble. .

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 target is just 1 in 7,184,404,942,701 less than 1 in seven trillion. That level is adjusted every 2016 blocks, or roughly every 2 weeks, with the aim of keeping rates of mining constant.

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The opposite is also correct. If computational power has been taken off of this network, the problem adjusts downward to earn mining easier. .

"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 specific number, they simply have to be the very 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 about 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, since 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 that I pose the'imagine what number why not look here I am thinking of' question, however I am not asking just three 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 is going to be quite difficult to guess the ideal answer." .

If 1 in 7 trillion doesn't sound difficult enough as is, here is the catch to the catch. Not only do bitcoin miners need to come up with the ideal hash, but they also must be the very first to perform 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 could be performed competitively on normal desktop computers. As time passes, however, miners realized 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 to the tens of thousands. .

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

An 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 approximately 80% to 90% of bitcoin computing power. .

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Between 1 in 7 trillion chances, scaling difficulty levels, and the huge network of consumers verifying transactions, one block of transactions is verified roughly every 10 minutes. But 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 every 10 minutes. Since the network of bitcoin users 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.