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In 2009it was 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 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 produce.

Here is the catch. In order to get bitcoin miners to really earn bitcoin from verifying transactions, two things must happen. First, they must confirm 1 megabyte (MB) value of transactions, which can technically be as little as 1 transaction but are far more often a few thousand, depending on how much data each transaction shops.

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Second, in order to add a block of transactions to the blockchain, miners must solve a intricate computational science difficulty, also called a"proof of work." What they're actually doing is trying to think of a 64-digit hexadecimal number, known as a"hash," that's less than or equal 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 about 7,184,404,942,701. That is, the chance of a pc producing a hash below the goal is 1 in 7,184,404,942,701 less than 1 in seven trillion. That level is corrected every 2016 blocks, or roughly every two weeks, with the aim of keeping rates of mining constant.

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The opposite is also true. If computational power has been taken from this network, the problem adjusts downward to make mining easier. .

"Say I tell three friends that I'm thinking of a number between 1 and 100, and 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 have to be the first person to guess any number that is less than or equal to the number I am thinking of.

"Let's say I am thinking of the number 19. If Friend A guesses 21they shed because 21>19. If Friend B guesses 16 and Friend C guesses 12, then they have both theoretically arrived at viable answers, since 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'guess what number I am thinking of' question, however I'm not asking only 3 friends, and I'm not thinking of a number between 1 and 100. Instead, I'm asking millions of prospective miners and I'm thinking of a 64-digit hexadecimal number. Now you see that it is going to be extremely hard 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 come up with the right 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 performed competitively on normal desktop computers. As time passes, however, miners recognized that graphics cards commonly used for video games tend to be 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 competitive that it can only be done profitably with the most up-to-date ASICs. When using desktop computers, GPUs, or elderly versions of ASICs, the expense of energy consumption actually exceeds the revenue generated. Even with the newest unit available, one computer 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 description 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 huge network of users verifying transactions, one block of transactions is verified roughly every 10 minutes. But its important to remember that 10 minutes is a goal, 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.