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In 2009it 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 entire 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 make.
Here's the catch. In order to get bitcoin miners to actually earn bitcoin from verifying transactions, two things have to happen. First, they need to verify 1 megabyte (MB) value of transactions, which can theoretically be as little as 1 transaction but are more often several thousand, depending on how much data each transaction shops.
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Second, in order to add a block of transactions to the blockchain, miners must solve a complex computational math problem, also called a"proof of work" What they are actually doing is trying to think of a 64-digit hexadecimal number, known as a"hash," that's less than or equal to the hash.
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In other words, it is a bet. .
The difficulty level of the most recent block at the time of writing is all about 7,184,404,942,701. That is, the chance of a computer producing a hash below the target is 1 in 7,184,404,942,701 less than 1 in seven trillion. That level is corrected every 2016 blocks, or roughly every 2 weeks, with the aim of keeping rates of mining constant.
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The opposite is also correct. If computational power has been taken off of the network, the difficulty adjusts downward to earn mining simpler. .
"Let us say I am thinking of 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 viable 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 that I look at more info pose the'imagine what number I am thinking of' question, however I am not asking only 3 friends, and I am not thinking of a number between 1 and 100. Rather, I'm asking millions of prospective miners and I am thinking about a 64-digit hexadecimal number. Now you see that it is going to be quite difficult to guess the right answer." .
If 1 in 7 trillion doesn't sound hard enough as is, here is the catch to the grab. Not only do bitcoin miners have to come up with the ideal hash, but they also have to be the Source first to perform it.
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These can run from $500 to the tens of thousands. .
Today, bitcoin mining is so competitive that 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 cost of energy consumption actually exceeds the revenue generated. Even with the newest unit at your disposal, one 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 high number of cubes 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 users 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.