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In 2009it had been 50. In 2013, it was 25, at the time of writing it is 12.5, and sometime in the center of 2020 it will halve to 6.25. .
At this speed 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 have to happen. First, they must confirm 1 megabyte (MB) worth of transactions, which can technically be as little as 1 transaction but are more often several thousand, depending on how much data each transaction stores.
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Second, in order to put in a block of transactions to the blockchain, miners should solve a intricate computational science difficulty, also called a"proof of work." What they are doing is trying to think of a 64-digit hexadecimal number, called a"hash," that is 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. That is, the chance of a pc producing a hash beneath the target is 1 in 7,184,404,942,701 less than 1 in seven trillion. That amount is adjusted every 2016 blocks, 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 is taken from this network, the problem adjusts downward to earn mining easier. .
"Say I tell three friends that I'm thinking about a number between 1 and 100, and 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 just have to be the first person to guess any number that's less than or equal to this number I am thinking of.
"Let us 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 supposes 12, then they've both theoretically arrived 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 goal answer of 19. .
"Now imagine that I present the'guess what number I am thinking of' question, but I'm not asking just three friends, and I am not thinking of a number between 1 and 100. Rather, I'm original site 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 difficult to guess the right answer." .
If 1 in 7 trillion doesn't sound difficult enough as is, here's the catch to the catch. Not only do bitcoin miners have to come up with the right 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 everything to do with how fast your computer can produce hashes. Just 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 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 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 surpasses the revenue generated. Even with the newest unit available, one computer is seldom 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 high 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 remember 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, but the number of transactions made in 10 minutes will eventually exceed the number of transactions that can be processed in 10 minutes.