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In 2009it was 50. In 2013, it had been 25, at the time of writing it is 12.5, and sometime in the middle of 2020 it will halve to 6.25. .

At this rate 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 must occur. First, they need to confirm 1 megabyte (MB) value of transactions, which can theoretically be as little as 1 transaction but are far more often a few 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 must fix a complex computational math problem, also referred to as a"proof of work" 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 hash.

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In other words, it's a bet. .

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 computer producing a hash below the target is just 1 in 7,184,404,942,701 less than 1 in 7 trillion. That level is corrected 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 from the network, the problem adjusts downward to make mining easier. .

"Say I tell three friends I'm thinking of a number between 1 and 100, and that I write that number on a sheet of paper and seal it in an envelope. My friends don't have to guess the exact number, they simply have to be the first person to figure any number that's less than or equal to the number I am thinking of.

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

"Now imagine I pose the'guess what number I'm thinking of' question, but I'm not asking just three friends, and I am not thinking of a number between 1 and 100. Rather, I am asking millions of would-be miners and I am thinking of a 64-digit hexadecimal number. Now you see that it is going to be quite difficult to guess the right answer." .

If 1 in 7 trillion doesn't sound difficult enough as is, here's the catch to the catch. Not only do bitcoin miners have to come up with the right hash, they also have to be the first to perform it.

Since 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. Only a decade ago, bitcoin miners could be carried out competitively on normal desktop computers. As time passes, however, miners recognized that graphics cards commonly utilized for video games were more effective at mining than desktops and graphics processing units (GPU) came to dominate the match.

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

Today, bitcoin mining is so aggressive it can only be done profitably using 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 at your disposal, one computer is rarely enough to compete with what what miners call"mining pools" .

A 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 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 also the huge network of consumers verifying transactions, one block of transactions is verified roughly every 10 minutes. However, 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. 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 special info in 10 minutes.