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In 2009, it 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 expensive for miners to produce.
Here's the catch. In order for bitcoin miners to actually earn bitcoin from verifying transactions, two things must occur. To begin with, they need to verify 1 megabyte (MB) worth of transactions, which can technically be as small as 1 transaction but are more often a few thousand, depending on how much information each transaction stores.
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Second, in order to put in a block of transactions to the blockchain, miners must solve a complex computational science difficulty, also referred to as a"proof of work" What they are doing is trying to come up with a 64-digit hexadecimal number, known as a"hash," that is less than or equal to the hash.
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In other words, it is 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 beneath the goal is 1 in 7,184,404,942,701 less than 1 in seven trillion. That amount is corrected every 2016 blocks, or about every 2 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 difficulty adjusts downward to make mining easier. .
"Let's say I am thinking of the number 19. If Friend A guesses 21they lose because 21>19. If Friend B supposes 16 and Friend C supposes 12, then they've both theoretically arrived at workable answers, because 16<19 and 12<19. There is no'extra credit' for Friend B, even though B's answer was nearer to the target answer of 19. .
"Now imagine that I present the'imagine 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 would-be miners and I am 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 7 trillion doesn't sound difficult enough as is, here is the catch to the grab. Not only do bitcoin miners have to think of the right hash, but they also have to be the first to perform it.
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These can run from $500 into the tens of thousands. .
Today, bitcoin mining is so aggressive it can only be done profitably using all the most up-to-date ASICs. When using desktop computers, GPUs, or elderly versions of ASICs, the cost of energy consumption actually surpasses the revenue generated. Even with the newest unit at your disposal, one pc is seldom 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 high number of cubes are mined by pools rather than by individual miners. In July 2017, mining pools and companies represented approximately 80% to 90% 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 confirmed roughly every 10 minutes. However, its important to keep in mind 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 every 10 minutes. As the network of bitcoin users continues to grow, but the number of transactions made in 10 minutes will eventually exceed the number of transactions that can be processed in 10 minutes.