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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 produce.

Here is the catch. In order to get bitcoin miners to really earn bitcoin from verifying transactions, two things have to occur. To begin with, they must confirm 1 megabyte (MB) worth of transactions, which can theoretically be as little as 1 transaction but are more often several thousand, depending on how much data each transaction stores.

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Second, in order to add a block of transactions to the blockchain, miners must fix a complex computational science difficulty, also referred to as a"proof of work." What they are doing is trying to think of a 64-digit hexadecimal number, called a"hash," that is less than or equal to the target hash.

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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 about 7,184,404,942,701. That is, 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 level is corrected every 2016 blocks, or about every 2 weeks, with the aim of keeping rates of mining constant.

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The opposite 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 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 exact number, they simply have to be the first person to guess any number that's less than or equal to this number I am thinking of.

"Let us say I'm thinking about the number 19. If Friend A guesses 21they shed because 21>19. If Friend B guesses 16 and Friend C supposes 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 that I pose the'guess what number I am thinking of' question, but I am not asking only 3 friends, and I'm not thinking of a number between 1 and 100. Rather, I am asking millions of would-be miners and I'm thinking of a 64-digit hexadecimal number. Now you see that it is going to be extremely difficult to guess the ideal answer." .

If 1 in 7 trillion doesn't sound difficult enough as is, here's the grab to the catch. Not only do bitcoin miners have to come up with the ideal hash, but they also must be the very first to do 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. Just a decade ago, bitcoin miners can be carried out competitively on normal desktops. Over time, however, miners realized that pictures cards commonly used for video games tend to be more capable of 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. .

Nowadays, bitcoin mining is so competitive that it can only be done profitably with all the latest up-to-date ASICs. When using desktop computers, GPUs, or elderly models of ASICs, the expense of energy consumption actually surpasses the revenue generated. Even with the newest unit available, one computer is seldom enough to compete with exactly what miners call"mining pools" .

A mining pool is a group of miners who combine their computing power and divide the mined bitcoin between participants. A disproportionately large 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 odds, scaling difficulty levels, and also the massive network of users verifying transactions, one block of transactions is verified 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 each 10 minutes. Since the network of bitcoin consumers continues to grow, but the number of transactions made in 10 minutes will eventually exceed the number of transactions which can be like it processed in 10 minutes.