# 5 Easy Facts About Big Coins Described

In 2009it had been 50. In 2013, it was 25, at 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 produce.

Here is the catch. In order to get bitcoin miners to actually earn bitcoin from verifying transactions, two things have to happen. To begin with, 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 must fix a intricate computational math problem, also called a"proof of labour ." What they are doing is trying to come up with a 64-digit hexadecimal number, known as a"hash," that's less than or equal 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 pc producing a hash beneath the goal is 1 in 7,184,404,942,701 less than 1 in seven trillion. That amount is adjusted 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 is taken off of this network, the problem adjusts downward to make mining easier. .

"Say I tell three friends 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 must be the very first person to figure any number that's less than or equal to the number I am 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 supposes 16 and Friend C supposes 12, then they have both technically came at viable answers, because 16<19 and 12<19. There is no'extra credit' for Friend B, even though B's answer was nearer to the goal answer of 19. .

"Now imagine I present the'guess what number I am thinking of' question, but I am find here not asking just 3 friends, and I'm not thinking of a number between 1 and 100. Rather, I am asking millions of would-be miners and I am thinking about a 64-digit hexadecimal number. Now you see that it's going to be quite difficult to guess the right answer." .

If 1 in seven trillion doesn't sound difficult enough as is, here's the catch to the grab. Not only do bitcoin miners need to think of the right hash, but they also must be the click this very 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. As time passes, however, miners recognized that pictures cards commonly utilized for video games were more effective at 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 aggressive that it can only be done profitably with the most up-to-date ASICs. When using desktop computers, GPUs, or older models of ASICs, the cost 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" .

A mining pool is a group of miners who combine their computing ability and divide 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 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 users verifying transactions, one block of transactions is confirmed roughly every 10 minutes. However, its important to remember that 10 minutes is a target, 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. 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.