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In 2009, it 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 speed 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's the catch. In order to get bitcoin miners to really earn bitcoin from verifying transactions, two things have to happen. To begin with, they need to verify 1 megabyte (MB) worth of transactions, which can technically be as small as 1 transaction but are far more often several thousand, depending on how much information each transaction shops.
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Second, in order to put in a block of transactions to the blockchain, miners should solve a intricate computational science difficulty, also called a"proof of work." What they are doing is trying to think of 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's 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 goal is 1 in 7,184,404,942,701 less than 1 in seven trillion. That amount is corrected every 2016 cubes, or about 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 the network, the difficulty adjusts downward to earn mining simpler. .
"Let's say I am 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 theoretically arrived at viable answers, since 16<19 and 12<19. There is no'extra credit' for Friend B, even though B's answer was closer to the target answer of 19. .
"Now imagine that I pose the'guess what number I'm thinking of' question, however I'm not asking only 3 friends, and I'm click to investigate not thinking of a number between 1 and 100. Instead, I am asking millions of prospective miners and I'm thinking about 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 grab to the catch. Not only do bitcoin miners need to come up with the ideal hash, but they also must be the first to do it.
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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 latest up-to-date ASICs. When using desktop computers, GPUs, or elderly versions 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" .
A mining pool is a group of miners who combine their computing ability and split 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 percent of bitcoin computing power. .
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Between 1 in 7 trillion chances, scaling difficulty levels, and also the huge network of consumers verifying transactions, one block of transactions is verified roughly every 10 minutes. However, 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 every 10 minutes. As the network of bitcoin users continues to grow, however, the number of transactions made in 10 minutes will eventually exceed the number of transactions that can be processed in 10 minutes.