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In other words, it's a bet. .

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The difficulty level of the most recent block at the time of writing is about 7,184,404,942,701. That is, the chance of a pc producing a hash beneath the target is 1 in 7,184,404,942,701 less than 1 in seven trillion. That amount is adjusted every 2016 blocks, or roughly every 2 weeks, with the goal of keeping rates of mining constant.

The opposite is also true. If computational power is taken off of the network, the problem adjusts downward to make mining simpler. .

"Say I tell three friends I'm thinking about 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 exact number, they simply have to be the first person to figure any number that's less than or equal to the number I'm thinking of.

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"Let us say I am thinking of the number 19. If Friend A guesses 21, they lose 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 target answer of 19. .

"Now imagine that I pose the'imagine what number I am thinking of' question, but I'm not asking only 3 friends, and I'm not thinking of a number between 1 and 100. Rather, I'm asking millions of would-be miners and I'm 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 have to think of the right hash, but they also must be the first to perform 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. Just a decade ago, bitcoin miners can be performed competitively on normal desktops. Over time, however, miners recognized 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.

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

Today, bitcoin mining is so competitive that it can only be done profitably using the latest up-to-date ASICs. When using desktop computers, GPUs, or older versions of ASICs, the cost of energy consumption actually surpasses 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 who combine their computing ability and split 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 odds, scaling difficulty levels, and also the massive network of consumers verifying transactions, one block of transactions is verified roughly every 10 minutes. But its important to remember that 10 minutes is a goal, 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 users continues to grow, but the number of transactions made in 10 minutes will eventually exceed the number of transactions that can be processed in 10 minutes.

This issue at the heart of the bitcoin protocol is known as scaling. Even though bitcoin miners generally agree that something must be done in Learn More order to address scaling, there is less consensus about how can it. At the time of writing, there are two major solutions to the scaling problem, either (1) to lower the amount of data needed to confirm each block or (2) to increase the number of transactions that each 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 their networks computing electricity required to incorporate a program that would reduce the amount of data needed to confirm each block. That is, they went with Solution 1.

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

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