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In 2009it had been 50. In 2013, it had been 25, at the time of writing it's 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 produce.
Here is the catch. In order to get bitcoin miners to actually earn bitcoin from verifying transactions, two things have to occur. First, they must verify 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 add a block of transactions to the blockchain, miners should fix a complex computational math problem, also called a"proof of work" What they're actually doing is trying to think of a 64-digit hexadecimal number, called 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 just 1 in 7,184,404,942,701 less than 1 in 7 trillion. That amount is corrected every 2016 cubes, or roughly every 2 weeks, with the goal of keeping rates of mining constant.
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The reverse is also correct. If computational power is taken from the network, the problem adjusts downward to earn mining easier. .
"Let us say I'm thinking of the number 19. If Friend A guesses 21, they lose because 21>19. If Friend B guesses 16 and Friend C supposes 12, then they have 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 present the'guess what number I'm thinking of' question, but I am not asking just 3 friends, and I'm not thinking of a number between 1 and 100. Rather, I'm asking millions of would-be miners find here 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 seven trillion doesn't sound difficult enough as is, here is the grab to the catch. Not only do bitcoin miners have to come up with the ideal hash, they also have to be the very first to perform it.
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These can run from $500 into 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 elderly versions of ASICs, the expense of energy go now consumption actually surpasses the revenue generated. Even with the newest unit at your disposal, one pc 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 large number of cubes are mined by pools rather than by individual miners. In July 2017, mining pools and companies represented roughly 80% to 90 percent of bitcoin computing power. .
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Between 1 in 7 trillion odds, scaling difficulty levels, and the massive 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 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 every 10 minutes. As 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.