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In 2009, it was 50. In 2013, it was 25, at 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 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's 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) worth of transactions, which can theoretically be as small as 1 transaction but are far more often several thousand, depending on how much data each transaction shops.

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Second, in order to put in a block of transactions to the blockchain, miners should fix a intricate computational science difficulty, also referred to as a"proof of work" What they're actually doing is trying to come up with 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 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 below the target is just 1 in 7,184,404,942,701 less than 1 in seven trillion. That amount is adjusted every 2016 blocks, or about every two weeks, with the aim of keeping rates of mining constant.

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

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"Say I tell three friends I'm thinking of 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 have to guess the specific number, website link they just have to be the first person to figure any number that's less than or equal to the number I am thinking of.

"Let's say I'm thinking of the number 19. If Friend A guesses 21they shed because 21>19. If Friend B guesses 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 nearer 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 just 3 friends, and I am not thinking of a number between 1 and 100. Rather, I am asking millions of prospective miners and I am thinking about a 64-digit hexadecimal number. Now you see that it's going to be quite difficult to guess the right answer." .

If 1 in 7 trillion doesn't sound hard enough as is, here's the grab to the grab. Not only do bitcoin miners have to think of the right hash, but they also must be the first to perform 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 can be performed competitively on normal desktop computers. As time passes, however, miners realized that graphics cards commonly utilized for video games were 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. .

Nowadays, bitcoin mining is so aggressive it can only be done profitably using the most up-to-date ASICs. When using desktop computers, GPUs, or elderly versions of ASICs, the expense of energy consumption actually surpasses the revenue generated. Even with the newest unit at your disposal, one computer is seldom 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 cubes 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 odds, scaling difficulty levels, and also the huge network of users 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 each 10 minutes. As the network of bitcoin users continues to grow, but 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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