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In 2009it had been 50. In 2013, it was 25, in the time of writing it is 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 produce.
Here's the catch. In order to get bitcoin miners to actually earn bitcoin from verifying transactions, two things have to occur. To begin with, they need to confirm 1 megabyte (MB) value of transactions, which can theoretically be as small as 1 transaction but are more often a few 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 should solve a complex computational math problem, also referred to as a"proof of work" What they're actually 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 is a gamble. .
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 computer producing a hash beneath the target is just 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 off of this network, the difficulty adjusts downward to earn mining simpler. .
"Say I tell three friends that 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 is less than or equal to this number I am thinking of.
"Let us say I'm thinking about 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, because 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 3 friends, and I'm not thinking of a number between 1 and 100. Rather, I am asking millions of prospective miners and I'm 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 difficult enough as is, here is the catch to the catch. Not only do bitcoin miners have to come up with the ideal hash, but 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 create hashes. Only a decade ago, bitcoin miners could be performed competitively on normal desktops. As time passes, however, miners recognized that graphics cards commonly used 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 competitive it can only be done profitably with the latest up-to-date ASICs. When using desktop computers, GPUs, or older versions of ASICs, the cost of energy click for info consumption actually surpasses the revenue generated. Even with the newest unit available, one computer is rarely enough to compete with what what miners call"mining pools." .
A mining pool is a group of miners that combine their computing power 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 approximately 80% to 90 percent of bitcoin computing power. .
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Between 1 in 7 trillion chances, scaling difficulty levels, and the huge network of users verifying transactions, one block of transactions is confirmed 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 every 10 minutes. Since 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.