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In 2009, it had been 50. In 2013, it was 25, at the time of writing it's 12.5, and sometime in the middle 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 precious over time but also more expensive 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 need to verify 1 megabyte (MB) value of transactions, which can technically be as little as 1 transaction but are far more often several thousand, depending on how much information each transaction stores.

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Second, in order to add a block of transactions to the blockchain, miners should fix a intricate computational math problem, also referred to as a"proof of work." What they're doing is trying to think of a 64-digit hexadecimal number, called a"hash," that's less than or equivalent to the target hash.

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In other words, it's a bet. .

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 below the goal is just 1 in 7,184,404,942,701 less than 1 in seven trillion. That level is adjusted every 2016 blocks, or roughly every 2 weeks, with the aim of keeping rates of mining constant.

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The reverse is also correct. If computational power has been taken off of this network, the problem adjusts downward to earn mining easier. .

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"Say I tell three friends I'm thinking of a number between 1 and 100, and I write that number on a sheet of paper and seal it in an envelope. My friends don't have to guess the exact number, they just must be the first person to guess any number that's less than or equal to this number I am thinking of.

"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 guesses 12, then they have both theoretically arrived at viable answers, since 16<19 and 12<19. There is 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'm thinking of' question, but I'm not asking only 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'm thinking about a 64-digit hexadecimal number. Now you see that it's going to be quite hard to guess the right answer." .

If 1 in 7 trillion doesn't sound difficult enough as is, here is the grab to the grab. Not only do hop over to these guys bitcoin miners have to think of the ideal hash, they also have to be the first to do it.

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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. Only a decade ago, bitcoin miners could be performed competitively on normal desktop computers. Over time, however, miners realized that graphics 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 into the tens of thousands. .

Nowadays, bitcoin mining is so aggressive that it can only be done profitably with all the most up-to-date ASICs. When using desktop computers, GPUs, or older versions of ASICs, the expense of energy consumption actually surpasses 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 divide the mined bitcoin between participants. A disproportionately high 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 also the huge network of users verifying transactions, one block of transactions is verified roughly every 10 minutes. However, 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 each 10 minutes. As the network of bitcoin users 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.

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