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

At this speed 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 expensive for miners to make.

Here is the catch. In order for bitcoin miners to really earn bitcoin from verifying transactions, two things have to happen. First, they need to confirm 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 put in a block of transactions to the blockchain, miners should solve a complex computational math problem, also referred to as a"proof of work" What they are doing is trying to think of a 64-digit hexadecimal number, known as a"hash," that's 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 beneath 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 two weeks, with the aim of keeping rates of mining constant.

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The reverse is also true. If computational power has been taken off of this network, the difficulty adjusts downward to earn mining simpler. .

"Say I tell three friends I'm thinking about 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 have to guess the specific number, they just must be the first person to figure any number moved here that is less than or equal to this number I am thinking of.

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

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

If 1 in seven trillion doesn't sound hard enough as is, here's the grab to the grab. Not only do bitcoin miners need to come up with the ideal hash, but they also must be the first to do it.

Since 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 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 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 it can only be done profitably using the latest up-to-date ASICs. When using desktop computers, GPUs, or elderly models of ASICs, the expense 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 chances, scaling difficulty levels, and also the massive network of users verifying transactions, one block of transactions is confirmed roughly every 10 minutes. But 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 every 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 that can be processed in 10 minutes.