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In 2009it had been 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 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 have to happen. To begin with, they need to verify 1 megabyte (MB) worth of transactions, which can theoretically be as small as 1 transaction but are more often a few 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 solve a complex computational math problem, also called a"proof of labour ." What they're actually doing is trying to think of a 64-digit hexadecimal number, known as a"hash," that's less than or equivalent to the hash.

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In other words, it is a bet. .

The difficulty level of the most recent block at the time of writing is 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 about every two weeks, with the goal of keeping rates of mining constant.

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

"Say I tell three friends I'm thinking about a number between 1 and 100, and that 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, they just have to be the very first person to 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 21, they shed 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's 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, however I am not asking only three friends, and I am not thinking of a number between 1 and 100. Instead, I am asking millions of would-be miners and I am thinking of a 64-digit hexadecimal number. Now you see that it is going to be quite difficult to guess the ideal answer." .

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

Since 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 can be carried out competitively on normal desktops. Over time, 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 into the tens of thousands. .

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

An mining pool is a group of miners that combine their computing ability and split 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 users verifying transactions, one block of transactions is confirmed roughly every 10 minutes. However, its important to keep in mind that 10 minutes is a goal, not a guideline.

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The bitcoin network can process about seven transactions per second, with helpful hints 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.