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In 2009, it had been 50. In 2013, it had been 25, in 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 produce.

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

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Second, in order to add a block of transactions to the blockchain, miners must solve a complex computational math problem, also called a"proof of work" What they are doing is trying to think of a 64-digit hexadecimal number, known as a"hash," that is 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. In other words, the chance of a computer producing a hash beneath the goal is 1 in 7,184,404,942,701 less than 1 in 7 trillion. That level is corrected every 2016 blocks, or about every 2 weeks, with the aim of keeping rates of mining constant.

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The reverse is also correct. If computational power is taken from 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 piece of paper and seal it in an envelope. My friends don't have to guess the specific number, they just must be the first person to figure any number that is less than or equal to this number I'm thinking of.

"Let us say I'm 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 have 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 closer to the goal answer of 19. .

"Now imagine that I pose the'guess what number I am thinking of' question, but I am not asking just 3 friends, and I am 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 extremely hard to guess the right answer." .

If index 1 in 7 trillion doesn't sound difficult enough as is, here's the grab to the catch. Not only do bitcoin miners have to think of the ideal hash, but they also must be the first to do 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. Only a decade ago, bitcoin miners could be carried out competitively on normal desktop computers. As time passes, however, miners realized that pictures 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 it can only be done profitably with the latest up-to-date ASICs. When using desktop computers, GPUs, or older versions of ASICs, the cost of energy consumption actually surpasses the revenue generated. Even with the newest unit available, one pc is rarely enough to compete with what what miners call"mining pools." .

A mining pool is a group of miners that combine their computing ability 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 approximately 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. However, its important to keep in mind that 10 minutes is a target, 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 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.