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In 2009, it was 50. In 2013, it had been 25, at 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 total number of bitcoin in circulation will approach a limit of 21 million, making the currency more scarce and valuable over time but also more expensive for miners to produce.

Here is the catch. In order to get bitcoin miners to actually 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 theoretically be as small 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 should solve a intricate computational math problem, also called a"proof of work." What they're actually doing is trying to come up with a 64-digit hexadecimal number, called a"hash," that is less than or equivalent 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. In other words, the chance of a computer producing a hash beneath the target is 1 in 7,184,404,942,701 less than 1 in 7 trillion. That level is adjusted every 2016 blocks, 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 is taken off of this network, the difficulty adjusts downward to earn mining simpler. .

"Say I tell three friends that I'm thinking of a number between 1 and 100, and I write that number on a piece of paper and seal it in an envelope. My friends don't need to guess the specific number, they simply must be the very first person to guess any number that is less than or equal to this number I'm thinking of.

"Let us say I am thinking of the number 19. If Friend A guesses 21they lose because 21>19. If Friend B supposes 16 and Friend C guesses 12, then they have both technically came at viable answers, because 16<19 and 12<19. There is no'extra credit' for Friend B, even though B's answer was nearer to the goal answer of 19. .

"Now imagine I present the'guess what number I'm thinking of' question, however I am not asking just 3 friends, and I am not thinking of a number between 1 and 100. Instead, I am asking millions of would-be miners and I'm thinking of 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 hard enough as is, here is the catch to the grab. Not only do bitcoin miners need to come up with the ideal hash, they also must be the first to perform it.

Because bitcoin mining is essentially guesswork, arriving at the right answer before another miner has almost everything to do with how fast your computer can produce hashes. Only a decade ago, bitcoin miners can be carried out competitively try here on normal desktops. Over time, however, miners recognized that pictures cards commonly utilized for video games were more effective at mining than desktops and graphics processing units (GPU) came to dominate the game.

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These can run from $500 to the tens of thousands. .

Today, bitcoin mining is so competitive that it can only be done profitably using the latest up-to-date ASICs. When using desktop computers, GPUs, or elderly versions of ASICs, the expense 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." .

An mining pool is a group of miners who combine their computing ability and split here the mined bitcoin between participants. A disproportionately high number of cubes 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 chances, scaling difficulty levels, and the huge 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. Since 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.