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In 2009, it was 50. In 2013, it was 25, in the time of writing it's 12.5, and sometime in the center 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 to get bitcoin miners to really earn bitcoin from verifying transactions, two things have to happen. First, they need to verify 1 megabyte (MB) worth of transactions, which can technically be as little as 1 transaction but are far more often a few 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 fix a complex computational math problem, also referred to as a"proof of work." What they are doing is trying to think of a 64-digit hexadecimal number, known as a"hash," that's less than or equivalent 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. In other words, the chance of a computer producing a hash beneath the target is just 1 in 7,184,404,942,701 less than 1 in 7 trillion. That level is adjusted every 2016 blocks, or about every 2 weeks, with the aim of keeping rates of mining constant.

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The opposite is also true. If computational power has been taken off of the network, the difficulty adjusts downward to earn mining simpler. .

"Say I tell three friends 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 figure any number that's less than or equal to this number I'm thinking of.

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

"Now imagine that I present the'guess what number see this I'm thinking of' question, however I'm not asking only three friends, and I am 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 seven trillion doesn't sound difficult enough as is, here is the grab to the catch. Not only do bitcoin miners need to think of the ideal hash, they also must be the very first to do 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 create hashes. Only a decade ago, bitcoin miners can be performed competitively on normal desktop computers. As time passes, however, miners recognized that graphics additional resources cards commonly utilized for video games tend to be more capable of 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 aggressive that it can only be done profitably with the most 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 pc is seldom enough to compete with what what miners call"mining pools." .

An 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% 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 my response is confirmed 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, however, the number of transactions made in 10 minutes will eventually exceed the number of transactions that can be processed in 10 minutes.