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In 2009, it was 50. In 2013, it had been 25, in the time of writing it's 12.5, and sometime in the center of 2020 it will halve to 6.25. .

At this rate 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's the catch. In order to get bitcoin miners to actually earn bitcoin from verifying transactions, two things must occur. First, they need to verify 1 megabyte (MB) worth of transactions, which can theoretically be as little as 1 transaction but are more often several thousand, depending on how much information each transaction stores.

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Second, in order to add a block of transactions to the blockchain, miners must fix a complex computational science difficulty, also called a"proof of labour ." What they are actually doing is trying to think of a 64-digit hexadecimal number, called a"hash," that's less than or equal 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 pc producing a hash beneath the target is 1 in 7,184,404,942,701 less than 1 in seven trillion. That amount is corrected every 2016 cubes, or roughly every two weeks, with the goal of keeping rates of mining constant.

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The reverse is also true. If computational power has been taken off of the network, the difficulty adjusts downward to earn mining easier. .

"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 need to guess the specific number, they just have to be the very first person to figure any number that's less than or equal to this number I am thinking of.

"Let's say I am thinking of the number 19. If Friend A guesses 21, they shed because 21>19. If Friend B supposes 16 and Friend C supposes 12, then they have both theoretically arrived at workable answers, because 16<19 and 12<19. There's no'extra credit' for Friend B, even though B's answer was closer to the target answer of 19. .

"Now imagine I present the'imagine what number I am thinking of' question, however I'm not asking just three friends, and I'm not thinking of a number between 1 and 100. Instead, I'm asking millions of would-be miners and I am thinking about 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 grab to the catch. Not only do bitcoin miners have to come up with the right hash, they also have to be the 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 can be performed competitively on normal desktop computers. As time passes, however, miners recognized that graphics cards commonly utilized for video games were more capable of mining than desktops and graphics processing units (GPU) came to dominate the game.

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

Today, bitcoin mining is so competitive that it can only be done profitably with the latest up-to-date ASICs. When using desktop computers, GPUs, or imp source elderly versions of ASICs, the expense of energy consumption actually surpasses 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 who combine their computing power and split 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 odds, scaling difficulty levels, and also the huge network of consumers verifying transactions, one block of transactions is verified roughly every 10 minutes. But its important to remember that 10 minutes is a target, not a rule.

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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 consumers continues to grow, however, the number of transactions made in 10 minutes will eventually exceed the number of transactions which can be processed in 10 minutes.