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In 2009it had been 50. In 2013, it was 25, at the time of writing it's 12.5, and sometime in the center of 2020 it will halve to 6.25. .

At this speed 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 make.

Here is the catch. In order for bitcoin miners to really earn bitcoin from verifying transactions, two things have to happen. To begin with, they must confirm 1 megabyte (MB) value of transactions, which can technically be as small as 1 transaction but are 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 must fix a complex computational math problem, also called a"proof of work." What they're actually 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's 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 beneath the target is 1 in 7,184,404,942,701 less than 1 in seven trillion. That level is corrected 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 true. If computational power is taken off of the network, the problem adjusts downward to earn mining simpler. .

"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 simply must be the first person to figure any number that is less than or equal to this number I am thinking of.

"Let us say I am thinking about the number 19. If Friend A guesses 21they lose because 21>19. If Friend B guesses 16 and Friend C supposes 12, then they have both technically came at workable answers, since 16<19 and 12<19. There is no'extra credit' for Friend B, even though B's answer was nearer to the goal answer of 19. .

"Now imagine that I pose the'guess what number I'm thinking of' question, but I'm not asking just three friends, and I'm not thinking of a number between 1 and 100. Rather, I'm 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 seven trillion doesn't sound hard enough as is, here's the grab to the catch. Not only do bitcoin miners need to think of the right hash, but they also must be the very first to perform it.

Since bitcoin mining is essentially guesswork, arriving at the right answer before another miner has everything to do with how fast your computer can produce hashes. Just a decade ago, bitcoin miners can be carried out competitively on normal desktop computers. As time passes, however, miners realized that pictures cards commonly utilized for video games were more capable of mining than desktops and graphics processing units (GPU) came to dominate the game.

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These can run from \$500 into the tens of thousands. .

Today, bitcoin mining is so aggressive that it can only be done profitably with the latest up-to-date ASICs. When using desktop computers, GPUs, or older versions of ASICs, the expense of energy consumption actually exceeds the revenue generated. Even with the newest unit at your disposal, one computer is seldom enough to compete with exactly what miners call"mining pools." .

An 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 roughly 80% to 90 percent of bitcoin computing power. .

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Between 1 in 7 trillion odds, scaling difficulty levels, and the massive network of users verifying transactions, one block of transactions is verified roughly every 10 minutes. However, its important to remember 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 anonymous the blockchain each 10 minutes. Since the network of bitcoin users 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.