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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 rate 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 make.

Here is the catch. In order for bitcoin miners to actually earn bitcoin from verifying transactions, two things must happen. First, they need to confirm 1 megabyte (MB) worth of transactions, which can theoretically be as little 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 referred to as a"proof of labour ." What they are 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. In other words, the chance of a computer producing a hash below the goal is 1 in 7,184,404,942,701 less than 1 in 7 trillion. That amount is adjusted every 2016 cubes, or roughly every 2 weeks, with the aim 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 difficulty adjusts downward to make mining easier. .

"Say I tell three friends I'm thinking about 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 need to guess the specific number, they simply have to be the very first person to guess any number that is less than or equal to the number I am thinking of.

"Let us say I am thinking of the number 19. If Friend A guesses 21they shed because 21>19. If Friend B guesses 16 and Friend C guesses 12, then they've 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 goal answer of 19. .

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

If 1 in seven trillion doesn't sound hard enough as is, here is the catch to the catch. Not only do bitcoin miners have to come up with the right hash, they also must be the very first to do 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 create hashes. Only a decade ago, bitcoin miners can be performed competitively on normal desktop computers. As time passes, however, miners realized 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 into the tens of thousands. .

Nowadays, bitcoin mining is so competitive that it can only be done profitably using all 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 rarely enough to compete with exactly what miners call"mining pools." .

A mining pool is a group of miners that combine their computing power and divide 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 roughly 80% to 90 percent of bitcoin computing power. .

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Between 1 in 7 trillion chances, scaling difficulty levels, and the massive network of consumers verifying transactions, one block of transactions is confirmed roughly every 10 minutes. However, its important to keep in mind that 10 minutes is a target, not a guideline.

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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 consumers 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.