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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 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 produce.

Here's the catch. In order for bitcoin miners to really earn bitcoin from verifying transactions, two things have to occur. First, they must confirm 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 information 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 doing is trying to come up with a 64-digit hexadecimal number, known as a"hash," that's less than or equivalent 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 goal 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 make mining simpler. .

"Say I tell three friends I'm thinking about 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 specific number, they simply have to be the first person to figure any number that is less than or equal to this number I'm thinking of.

"Let's 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 supposes 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 goal answer of 19. .

"Now imagine I present the'imagine 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 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 hard to guess the right answer." .

If 1 in seven trillion doesn't sound hard enough as is, here is the catch to the grab. Not only do bitcoin miners need to come up with the ideal hash, they also have to be the first to perform 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. Just a decade ago, bitcoin miners could be carried out competitively on normal desktops. As time passes, however, miners realized that graphics cards commonly used 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. .

Today, bitcoin mining is so competitive it can only be done profitably using all the latest up-to-date ASICs. When using desktop computers, GPUs, or elderly models of ASICs, the cost of energy consumption actually exceeds 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 power and split the mined bitcoin between participants. A disproportionately large number of cubes are mined by pools rather than by individual miners. In July 2017, mining pools and companies represented approximately 80% to 90 percent 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. However, its important to remember that 10 minutes is a target, this content 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, but the number of transactions made in 10 minutes will eventually exceed the number of transactions that can be processed in 10 minutes.