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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 speed of halving, the entire 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 for bitcoin miners to really earn bitcoin from verifying transactions, two things must happen. First, they need to verify 1 megabyte (MB) value of transactions, which can theoretically be as little as 1 transaction but are 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 solve a intricate computational math problem, also referred to as a"proof of labour " What they are doing is trying to come up with a 64-digit hexadecimal number, called 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 computer producing a hash below the target is just 1 in 7,184,404,942,701 less than 1 in seven trillion. That amount is corrected every 2016 cubes, or roughly every two weeks, with the goal of keeping rates of mining constant.
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The opposite is also true. If computational power has been taken off of the network, the problem adjusts downward to earn mining simpler. .
"Let us say I am thinking about the number 19. If Friend A guesses 21they shed because 21>19. If Friend B supposes 16 and Friend C guesses 12, then they have both theoretically arrived at workable 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 pose the'guess what number I'm thinking of' question, but I am not asking only 3 friends, and I'm not thinking of a number between 1 and 100. Instead, I am asking millions of would-be miners and I am thinking about a 64-digit hexadecimal number. Now you see that it is going to be quite difficult to guess the ideal answer." .
If 1 in seven trillion doesn't sound difficult enough as is, here's the grab to the catch. Not only do bitcoin miners need to come up with the right hash, 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 using the latest up-to-date ASICs. When using desktop computers, GPUs, or elderly models of ASICs, the expense of energy consumption actually exceeds the revenue generated. Even with the newest unit at your disposal, one pc is rarely enough to compete with exactly what miners call"mining pools." .
An mining pool is a group of miners that combine their computing power 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 approximately 80% to 90 percent of bitcoin computing power. .
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Between 1 in 7 trillion odds, scaling difficulty levels, and also the huge network of users verifying transactions, one block of transactions is verified roughly every 10 minutes. But its important to keep in mind 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. 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 which can be processed in 10 minutes.