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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 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 costly 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 need to confirm 1 megabyte (MB) worth of transactions, which can theoretically be as small as 1 transaction but are far more often several thousand, depending on how much data each transaction shops.
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Second, in order to put in a block of transactions to the blockchain, miners must solve a complex computational math problem, also referred to as a"proof of work" What they are actually doing is trying to think of a 64-digit hexadecimal number, known as a"hash," that is less than or equivalent to the 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 all about 7,184,404,942,701. That is, the chance of a pc producing a hash below the target is 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 from the network, the problem adjusts downward to earn mining simpler. .
"Let's say I am thinking of the number 19. If Friend A guesses 21they lose because 21>19. If Friend B guesses 16 and Friend C supposes 12, then they've 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 that I pose the'guess what number I'm thinking of' question, but I am not asking only three friends, and I am 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 is going to be extremely difficult to guess the ideal answer." .
If 1 in seven trillion doesn't sound hard enough as is, here's the catch to the grab. Not only do bitcoin miners need to come up with the right hash, but they also must be the first to perform it.
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These can run from $500 into the tens of thousands. .
Nowadays, bitcoin mining is so aggressive it can only be done profitably with the most 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 at your disposal, one computer is rarely enough to compete with what what miners call"mining pools" .
A mining pool is a group of miners that combine their computing power 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 approximately 80% to 90 percent of bitcoin computing power. .
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Between 1 in 7 trillion chances, scaling difficulty levels, and also the huge network of users verifying transactions, one block of transactions is confirmed 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. Since the network of bitcoin users continues to grow, however, the number of transactions made in 10 minutes her response will eventually exceed the number of transactions that can be processed in 10 minutes.