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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 center 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 precious over time but also more expensive 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. First, they must verify 1 megabyte (MB) worth of transactions, which can theoretically be as small as 1 transaction but are far more often a few thousand, depending on how much data each transaction stores.

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Second, in order to add a block of transactions to the blockchain, miners should fix a intricate 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, known as a"hash," that is less than or equal to the hash.

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 1 in 7,184,404,942,701 less than 1 in 7 trillion. That amount is adjusted every 2016 blocks, or about every two weeks, with the goal of keeping rates of mining constant.

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The reverse is also correct. If computational power has been taken off of the network, the problem adjusts downward to earn mining easier. .

"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 just must be the first person to guess any number that's less than or equal to this number I'm thinking of.

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

"Now imagine that I pose the'guess what number I'm thinking of' helpful resources question, but I'm not asking only three friends, and I'm not thinking of a number between 1 and 100. Instead, I'm 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 difficult to guess the ideal answer." .

If 1 in seven trillion doesn't sound difficult enough as is, here is the grab to the grab. Not only do bitcoin miners have to think of the right hash, but they also have to be the very first to perform it.

Since bitcoin mining is essentially guesswork, arriving at the right answer before another miner has everything to do with how fast your computer can produce hashes. Only a decade ago, bitcoin miners could be carried out competitively on normal desktop computers. Over time, however, miners recognized that pictures cards commonly used 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. .

Nowadays, bitcoin mining is so aggressive that it can only be done profitably with all the most up-to-date ASICs. When using desktop computers, GPUs, or older models of ASICs, the cost of energy consumption actually exceeds the revenue generated. Even with the newest unit available, one computer is seldom enough to compete with what 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 approximately 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 target, not a guideline.