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In 2009, it was 50. In 2013, it was 25, at 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 make.
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) value of transactions, which can technically be as little as 1 transaction but are far more often a few thousand, depending on how much information 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 labour ." What they're actually doing is trying to think of a 64-digit hexadecimal number, called a"hash," that is less than or equal to the 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. In other words, the chance of a pc producing a hash beneath 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 reverse is also true. If computational power is taken off of this network, the problem adjusts downward to make mining easier. .
"Let us say I'm thinking of the number 19. If Friend A guesses 21they lose because 21>19. If Friend B supposes 16 and Friend C supposes 12, then they have both technically came at workable answers, since 16<19 and 12<19. There is no'extra credit' for Friend B, even though B's answer was nearer to the target answer of 19. .
"Now imagine that I pose the'guess what number I am thinking of' question, but I'm not asking just three friends, and I am not thinking of a check my reference number between 1 and 100. Instead, I am asking millions of would-be miners and I'm 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 7 trillion doesn't sound difficult enough as is, here is the grab to the catch. Not only do bitcoin miners need to think of the ideal hash, but 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 aggressive 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 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 who 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 chances, scaling difficulty levels, and the massive network of consumers 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 each 10 minutes. As 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.