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In 2009, it was 50. In 2013, it was 25, in 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 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 costly for miners to produce.
Here is 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 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 must fix a complex computational math problem, also referred to as a"proof of work" What they're doing is trying to come up with 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 about 7,184,404,942,701. In other words, the chance of a computer producing a hash below the goal is just 1 in 7,184,404,942,701 less than 1 in 7 trillion. That amount is adjusted every 2016 cubes, or about every two weeks, with the goal of keeping rates of mining constant.
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The opposite is also correct. If computational power has been taken off of this network, the difficulty adjusts downward to earn mining easier. .
"Let's say I am thinking about the number 19. If Friend A guesses 21, they lose because 21>19. If Friend B supposes 16 and Friend C guesses 12, then they have both theoretically arrived at viable answers, because 16<19 and 12<19. There is no'extra credit' for Friend B, even though B's answer was closer to the goal answer of 19. .
"Now imagine I present the'guess 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. Instead, I am asking millions of prospective miners and I am thinking of a 64-digit hexadecimal number. Now you see that it's going to be extremely hard to guess the right answer." .
If 1 in seven trillion doesn't sound hard enough as is, here's the catch to the grab. Not only do bitcoin miners need to think of the right hash, they also have to be the first to do it.
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These can run from $500 into the tens of thousands. .
Nowadays, 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 elderly models of ASICs, the cost of energy consumption actually surpasses the revenue generated. Even with the newest unit at your disposal, one computer is seldom enough to compete with exactly what miners call"mining pools" .
A mining pool is a group of miners that combine their computing power and split 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% of bitcoin computing power. .
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Between 1 in 7 trillion odds, 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 remember that 10 minutes is a goal, 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. 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.