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In other words, it is a bet. .

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

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

"Say I tell three friends that 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 just must be the very first person to figure any number that is less than or equal to this number I'm thinking of.

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

"Now imagine I present the'guess what number I am thinking of' question, however I'm not asking only 3 friends, and I am not thinking of a number between 1 and 100. Instead, 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 extremely hard to guess the ideal answer." .

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

Because bitcoin mining is essentially guesswork, arriving at the right 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 desktop computers. As time passes, 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 match.

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

Nowadays, bitcoin mining is so competitive it can only be done profitably with the most up-to-date ASICs. read review When using desktop computers, GPUs, or older versions of ASICs, the expense of energy consumption actually exceeds the revenue generated. Even with the newest unit available, one pc is rarely enough to compete with what what miners call"mining pools." .

A mining pool is a group of miners who combine their computing ability 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% of bitcoin computing power. .

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. 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. Since the network of bitcoin users continues to grow, but the number of transactions made in 10 minutes will eventually exceed the number of transactions which can be processed in 10 minutes.

This issue at the center of the bitcoin protocol is known as scaling. While bitcoin miners generally agree that something has to be done to deal with scaling, there is less consensus about how can it. At the time of writing, there are two big solutions to this scaling problem, either (1) to decrease the amount of information needed to verify each block or (2) to increase the number of transactions that every block can store.

Solution 2 will deal with scaling by allowing for much more information to be processed every 10 minutes. .

In July 2017, bitcoin miners and mining companies representing approximately 80% to 90 percent of the networks computing electricity voted to incorporate a program that will decrease the amount of information needed to verify each block. That is, they went with Solution 1.

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The app which miners voted to increase the bitcoin protocol is called a segregated witness, or SegWit. This term is an amalgamation of Segregated, meaning to separate, and Witness, which refers to signatures on a bitcoin transaction. Segregated Witness, then, means to separate transaction signatures from a block and attach them as an extended block.