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In 2009, it had been 50. In 2013, it had been 25, at 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 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 must occur. First, they need to confirm 1 megabyte (MB) worth 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 must solve a intricate computational science difficulty, also called a"proof of labour " What they're actually 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 beneath the target is 1 in 7,184,404,942,701 less than 1 in seven trillion. That amount is corrected every 2016 cubes, or about every 2 weeks, with the goal of keeping rates of mining constant.

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The opposite is also correct. If computational power has been taken from the network, the problem adjusts downward to earn mining easier. .

"Say I tell three friends that I'm thinking of 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 have to guess the exact number, they simply have to be the first person to figure any number that's less than or equal to the 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 guesses 12, then they've both theoretically arrived at workable answers, since 16<19 and 12<19. There's no'extra credit' for Friend B, even though B's answer was nearer to the target answer of 19. .

"Now imagine I present the'imagine what number I'm thinking of' question, but I'm not asking only three friends, and I am not thinking of a number between 1 and 100. Rather, I'm 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 right answer." .

If 1 in seven trillion doesn't sound hard enough as is, here is the catch to the catch. Not only do bitcoin miners have to think of the ideal hash, they also must be the first to do it.

Since 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 can be carried out competitively on normal desktops. Over time, however, miners recognized that graphics cards commonly utilized for video games tend to be 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 to the tens of thousands. .

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

An mining pool is a group of miners that combine their computing ability 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 chances, scaling difficulty levels, and also the massive network of consumers 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 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 consumers continues to grow, but the official website number of transactions made in 10 minutes will eventually exceed the number of transactions which can be processed in 10 minutes.