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In 2009, it had been 50. In 2013, it was 25, at the time of writing it is 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 for bitcoin miners to really earn bitcoin from verifying transactions, two things must happen. First, they need to verify 1 megabyte (MB) value of transactions, which can technically be as small as 1 transaction but are far more often several thousand, depending on how much data each transaction stores.

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Second, in order to add a block of transactions to the blockchain, miners should solve a intricate computational math problem, also called a"proof of work" What they are doing is trying to come up with a 64-digit hexadecimal number, called a"hash," that is less than or equal to the target 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 about 7,184,404,942,701. That is, the chance of a computer producing a hash below the goal is 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 has been taken off of 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 piece of paper and seal it in an envelope. My friends don't need to guess the specific number, they just must be the first person to guess i thought about this any number that is 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 viable answers, because 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 present the'guess what number I'm thinking of' question, however I'm not asking only three friends, and I'm not thinking of a number between 1 and 100. Instead, I am asking millions of would-be 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 ideal answer." .

If 1 in 7 trillion doesn't sound hard enough as is, here is the catch to the grab. Not only do bitcoin miners have to come up with the ideal hash, they also have to be the very first to do it.

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Since bitcoin mining is essentially guesswork, arriving at the ideal answer before their explanation another miner has almost everything to do with how fast your computer can produce hashes. Just a decade ago, bitcoin miners can be carried out competitively on normal desktops. Over time, however, miners recognized that graphics cards commonly utilized for video games were more effective at 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. .

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

A mining pool is a group of miners that combine their computing ability 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 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 users verifying transactions, one block read of transactions is verified 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 transactions being logged in the blockchain every 10 minutes. Since the network of bitcoin consumers continues to grow, however, 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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