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In 2009, it had been 50. In 2013, it was 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 valuable over time but also more costly for miners to make.

Here's the catch. In order to get 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 data each transaction stores.

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Second, in order to add a block of transactions to the blockchain, miners must fix a intricate computational science difficulty, also called a"proof of work." What they are actually doing is trying to come up with a 64-digit hexadecimal number, called a"hash," that is less than or equivalent to the 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. That is, the chance of a pc producing a hash beneath the goal is just 1 in 7,184,404,942,701 less than 1 in seven trillion. That amount is corrected every 2016 cubes, or roughly every two 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 make mining easier. .

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"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 need to guess the specific number, they just have to be the very first person to guess any number that is less than or equal to the number I am thinking of.

"Let's say I am thinking about the number 19. If Friend A guesses 21, they lose because 21>19. If Friend B supposes 16 and Friend C supposes 12, then they've both technically came at viable answers, because 16<19 and 12<19. There's no'extra credit' for Friend B, even though B's answer was closer to the target 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. Instead, I'm asking millions of prospective miners and I am thinking about a 64-digit hexadecimal number. Now you see that it's going to be extremely difficult to guess the right answer." .

If 1 in 7 trillion doesn't sound hard enough as is, here is the grab to the grab. Not only do bitcoin miners need to come up with the ideal hash, they also must be the very first to perform 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 create hashes. Just a decade ago, bitcoin miners could be performed competitively on normal desktops. As time passes, however, miners recognized that pictures cards commonly utilized for video games were more effective at mining than desktops and graphics processing units (GPU) came to dominate the match.

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These can run from $500 to the tens of thousands. .

Today, bitcoin mining is so competitive 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 cost of energy consumption actually exceeds the revenue generated. Even with the newest unit at your disposal, one moved here computer is rarely enough to compete with what what miners call"mining pools." .

An mining pool is a group of miners who combine their computing power 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 approximately 80% to 90% of bitcoin computing power. .

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Between 1 in 7 trillion odds, scaling difficulty levels, and the huge 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 target, 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 consumers 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.

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