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In 2009it was 50. In 2013, it was 25, in the time of writing it's 12.5, and sometime in the middle 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 valuable over time but also more costly for miners to make.

Here is the catch. In order for bitcoin miners to really earn bitcoin from verifying transactions, two things have to occur. First, 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 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 science difficulty, 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's a bet. .

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 pc producing a hash below the goal is just 1 in 7,184,404,942,701 less than 1 in 7 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 opposite is also correct. If computational power is taken off of the network, the problem adjusts downward to earn mining easier. .

"Say I tell three friends I'm thinking of 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 exact number, they just must be the first person to guess any number that's less than or equal to the number I her response am thinking of.

"Let's say I am thinking about the number 19. If Friend A guesses 21, they shed because 21>19. If Friend B guesses 16 and Friend C supposes 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 pose the'guess what number I'm thinking of' question, however 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'm thinking about a 64-digit hexadecimal number. Now you see that it is going to be extremely hard to guess the right answer." .

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

Since bitcoin mining is essentially guesswork, arriving at the right answer before another miner has almost everything to do with how fast your computer can produce hashes. Just a decade ago, bitcoin miners could be carried out competitively on normal desktops. 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 can run from $500 to the tens of thousands. .

Today, bitcoin mining is so aggressive that it can only be done profitably using all the latest up-to-date ASICs. When using desktop computers, GPUs, or older models of ASICs, the cost of energy consumption actually surpasses the revenue generated. Even with the newest unit at your disposal, 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 power and divide the mined bitcoin between participants. A disproportionately large number of blocks are mined by pools rather than by individual miners. In July 2017, mining pools and companies represented roughly 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 consumers verifying transactions, this one block of transactions is confirmed roughly every 10 minutes. However, its important to remember that 10 minutes is a goal, 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 article 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.