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In 2009it was 50. In 2013, it was 25, in the time of writing it is 12.5, and sometime in the middle 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 valuable over time but also more expensive for miners to produce.

Here's the catch. In order for bitcoin miners to really earn bitcoin from verifying transactions, two things must occur. First, they must verify 1 megabyte (MB) worth of transactions, which can theoretically be as small as 1 transaction but are more often a few 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 fix a intricate computational science difficulty, also referred to as a"proof of labour " What they're doing is trying to think of a 64-digit hexadecimal number, called a"hash," that's 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 computer producing a hash beneath the goal is just 1 in 7,184,404,942,701 less than 1 in 7 trillion. That amount is corrected every 2016 cubes, or about every two 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 this network, the problem adjusts downward to earn mining simpler. .

"Say I tell three friends that I'm thinking about 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 need to guess the exact number, they simply must be the first person to guess any number that is less than or equal to this number I'm 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 guesses 12, then they have both theoretically arrived at workable answers, since 16<19 and 12<19. There is no'extra credit' for Friend B, even the original source 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, however I am not asking only 3 friends, and I'm not thinking of a number between 1 and 100. Rather, I'm asking millions of prospective miners and I'm thinking of a 64-digit hexadecimal number. Now you see that it's going to be extremely difficult to guess the ideal answer." .

If 1 in seven trillion doesn't sound difficult enough as is, here's the grab to the catch. Not only do bitcoin miners have to come up with the ideal hash, they also have to be the very first to perform it.

Because bitcoin mining is essentially guesswork, arriving at the ideal answer before another miner has almost everything to do with how fast your computer can produce hashes. Just a decade ago, bitcoin miners can be performed competitively on normal desktop computers. As time passes, however, miners realized that pictures cards commonly utilized 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. .

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

A mining pool is a group of miners who combine their computing ability and split 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 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. But its important to keep in mind that 10 minutes is a goal, not a guideline.

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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.