# The Big Coins Diaries

In 2009it 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 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 costly for miners to make.

Here is the catch. In order for bitcoin miners to really earn bitcoin from verifying transactions, two things must occur. To begin with, they need to confirm 1 megabyte (MB) worth of transactions, which can theoretically be as small as 1 transaction but are far more often several thousand, depending on how much data each transaction shops.

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Second, in order to put in a block of transactions to the blockchain, miners should fix a complex computational math problem, also called a"proof of labour " What they're actually doing is trying to think of a 64-digit hexadecimal number, called a"hash," that is less than or equivalent to the 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 all about 7,184,404,942,701. That is, the chance of a pc producing a hash below the goal is just 1 in 7,184,404,942,701 less than 1 in 7 trillion. That level is corrected every 2016 cubes, or roughly every two weeks, with the aim of keeping rates of mining constant.

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The opposite is also correct. If computational power is taken from this 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 that I write that number on a piece of paper and seal it in an envelope. My friends don't have to guess the specific number, they simply have to be the very first person to figure any number that's less than or equal to this number I am thinking of.

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

"Now imagine that I present the'guess what number I am thinking of' question, but I am not asking only three friends, and I am not thinking of a number between 1 and 100. Instead, I'm 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 extremely hard to guess the ideal answer." .

If 1 in seven trillion doesn't sound find out here difficult enough as is, explanation here's the catch to the grab. Not only do bitcoin miners need to come up with the right hash, they also have to be the very first to do it.

Because bitcoin mining is essentially guesswork, arriving at the ideal answer before another miner has everything to do with how fast your computer can create hashes. Just a decade ago, bitcoin miners could be carried out competitively on normal desktops. As time passes, however, miners realized that graphics cards commonly used for video games tend to be more capable of mining than desktops and graphics processing units (GPU) came to dominate the game.

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These can run from \$500 into the tens of thousands. .

Nowadays, bitcoin mining is so aggressive it can only be done profitably using the most 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 seldom enough to compete with exactly what miners call"mining pools" .

An mining pool is a group of miners that combine their computing ability and split the mined bitcoin between participants. A disproportionately high number of blocks are mined click 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 chances, scaling difficulty levels, and also the massive network of consumers verifying transactions, one block of transactions is confirmed roughly every 10 minutes. But its important to remember 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.