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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 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 expensive for miners to produce.

Here is the catch. In order to get bitcoin miners to really earn bitcoin from verifying transactions, two things must occur. First, they need to confirm 1 megabyte (MB) value of transactions, which can technically be as small as 1 transaction but are far more often a few 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 math problem, also called a"proof of work" What they are actually doing is trying to think of a 64-digit hexadecimal number, called a"hash," that is 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 computer producing a hash below the goal is 1 in 7,184,404,942,701 less than 1 in seven trillion. That level is corrected every 2016 blocks, or about every 2 weeks, with the goal of keeping rates of mining constant.

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The reverse is also correct. If computational power is taken off of this network, the problem adjusts downward to make mining simpler. .

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"Say I tell three friends that I'm thinking of 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 simply must be the very first person to visit the website figure any number that is less than or equal to the number I am thinking of.

"Let us say I am thinking of the number 19. If Friend A guesses 21they lose because 21>19. If Friend B guesses 16 and Friend C guesses 12, then they've 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 goal answer of 19. .

"Now imagine I Our site present the'guess what number I am thinking of' question, but I am not asking just three friends, and I'm not thinking of a number between 1 and 100. Instead, I'm asking millions of prospective 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 grab to the catch. Not only do bitcoin miners have to come up with the ideal hash, but they also have to be the 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 create hashes. Only a decade ago, bitcoin miners can be performed competitively on normal desktop computers. Over time, however, miners realized that graphics cards commonly used for video games were more effective at mining than desktops and graphics processing units (GPU) came to dominate the match.

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These find out can run from $500 to the tens of thousands. .

Today, bitcoin mining is so competitive it can only be done profitably using the latest up-to-date ASICs. When using desktop computers, GPUs, or older models of ASICs, the expense of energy consumption actually surpasses the revenue generated. Even with the newest unit at your disposal, one pc 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 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% of bitcoin computing power. .

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Between 1 in 7 trillion chances, scaling difficulty levels, and the massive network of users verifying transactions, one block of transactions is verified roughly every 10 minutes. But its important to keep in mind that 10 minutes is a goal, 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 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.

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