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In other words, it's a bet. .

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

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

"Say I tell three friends that I'm thinking of a number between 1 and 100, and 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 just must be the very first person to figure any number that's less than or equal to the number I am thinking of.

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"Let's say I am thinking about the number 19. If Friend A guesses 21they lose because 21>19. If Friend B supposes 16 and Friend C supposes 12, then they've both technically came at viable answers, because 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 I pose the'guess what number I am thinking of' question, but 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 quite hard to guess the right answer." .

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

Since 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 can be performed competitively on normal desktop computers. As time passes, however, miners recognized that graphics cards commonly utilized for video games tend to be more capable of mining than desktops and graphics processing units (GPU) came to dominate the game.

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

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

An 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. .

Between 1 in 7 trillion odds, scaling difficulty levels, and also the visit this page massive network of users verifying transactions, one block of transactions is confirmed roughly every 10 minutes. However, its important to remember 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, 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 has to be done in order to deal with scaling, there is less consensus about here how do it. At the time of writing, there are two major solutions to this scaling problem, either (1) to lower the amount of information needed to verify each block or (2) to increase the number of transactions that every block can save.

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

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

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The program that miners voted to add to 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 out of a block and attach them within an extended block.