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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 produce.

Here's the catch. In order for bitcoin miners to actually earn bitcoin from verifying transactions, two things have to occur. First, they must verify 1 megabyte (MB) value of transactions, which can theoretically be as small as 1 transaction but are more often a few thousand, depending on how much information each transaction shops.

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Second, in order to add a block of transactions to the blockchain, miners should fix a complex computational math problem, also called a"proof of work" What they're doing is trying to think of a 64-digit hexadecimal number, known as a"hash," that's less than or equal to the target 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. In other words, the chance of a computer producing a hash beneath the target is 1 in 7,184,404,942,701 less than 1 in seven trillion. That amount 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 is taken from the network, the problem 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 piece of paper and seal it in an envelope. My friends don't need to guess the exact number, they simply have to be the very 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 about the number 19. If Friend A guesses 21they lose because 21>19. If Friend B guesses 16 and Friend C guesses 12, then they have both theoretically arrived 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 target answer of 19. .

"Now imagine I pose the'guess what number I'm thinking of' question, but I'm not asking only 3 friends, and I'm not thinking of a number between 1 and 100. Instead, I am asking millions of would-be 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 ideal answer." . my website

If 1 in 7 trillion doesn't sound hard enough as is, here's the catch to the catch. Not only do bitcoin miners have to think of the ideal hash, but they also must be the first to perform it.

Because 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. Just a decade ago, bitcoin miners can be carried out competitively on normal desktop computers. As time passes, however, miners recognized that graphics cards commonly used for video games tend to be 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 aggressive it can only be done profitably with the most up-to-date ASICs. When using desktop computers, GPUs, or elderly versions of ASICs, the cost of energy consumption actually surpasses the revenue generated. Even with the newest unit available, one pc is seldom enough to compete with exactly what miners call"mining pools" .

A mining pool is a group of miners who combine their computing ability and divide 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% of bitcoin computing power. .

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Between 1 in 7 trillion odds, scaling difficulty levels, and 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 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 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.