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In 2009it was 50. In 2013, it was 25, in 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 precious 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 must occur. First, they must verify 1 megabyte (MB) value of transactions, which can technically be as little as 1 transaction but are far more often a few 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 fix a complex computational math problem, also called a"proof of labour " What they're doing is trying to think of a 64-digit hexadecimal number, known as a"hash," that is 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 below the target is just 1 in 7,184,404,942,701 less than 1 in 7 trillion. That level is corrected every 2016 blocks, or roughly every two weeks, with the aim of keeping rates of mining constant.
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The opposite is also true. If computational power is taken off of the network, the difficulty adjusts downward to make mining easier. .
"Let's say I am thinking about the number 19. If Friend A guesses 21, they shed because 21>19. If Friend read here B guesses 16 and Friend C supposes 12, then they have both technically came 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 I pose the'imagine what number I am thinking of' question, however I am not asking just three friends, and I'm 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 hard to guess the right answer." .
If 1 in 7 trillion doesn't sound difficult enough as is, here is the catch to the catch. Not only do bitcoin miners have to think of the right hash, but they also must 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 that it can only be done profitably with all the latest 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 at your disposal, one computer is rarely enough to compete with exactly what miners call"mining pools" .
An mining pool is a group of miners that combine their computing ability try these out 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 roughly 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 consumers 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 each 10 minutes. As the network of bitcoin consumers continues to grow, however, the number of transactions made in 10 minutes will eventually exceed the number of transactions which can be processed in 10 minutes.