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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. In other words, the chance of a pc producing a hash beneath the target is 1 in 7,184,404,942,701 less than 1 in 7 trillion. That amount is adjusted every 2016 blocks, or roughly every two weeks, with the aim of keeping rates of mining constant.

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

"Say I tell three friends 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 need to guess the exact number, they simply 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 us say I am 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'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'imagine what number I'm thinking of' question, however I'm not asking only three friends, and I'm not thinking of a 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 quite difficult to guess the ideal answer." .

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If 1 in 7 trillion doesn't sound difficult enough as is, here is the grab to the grab. Not only do bitcoin miners need to think of the right hash, 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 create hashes. Just a decade ago, bitcoin miners can be performed competitively on normal desktop computers. Over time, however, miners recognized 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 match.

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

Nowadays, bitcoin mining is so aggressive it can only be done profitably using all Resources the latest up-to-date ASICs. When using desktop computers, GPUs, or elderly versions of ASICs, the cost of energy consumption actually exceeds the revenue generated. Even with the newest unit at your disposal, one computer is rarely enough to compete with what what miners call"mining pools" .

A mining pool is a group of miners that combine their computing power 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 percent of bitcoin computing power. .

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. However, 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. 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 that can be processed in 10 minutes.

This dilemma at the heart of the bitcoin protocol is known as scaling. While bitcoin miners generally agree that something must be done in order to address scaling, there is less consensus about how can it. In the time of writing, there are two major solutions to the scaling problem, either (1) to lower the amount of information needed to verify each block or (2) to increase the number of transactions that each block can save.

Solution 2 would deal 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 percent of their networks computing power voted to incorporate a program that would reduce the amount of information needed to confirm each block. That is, they went with Solution 1.

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The app that miners voted to add to the bitcoin protocol is known as a segregated witness, or SegWit. This expression 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 join them within an extended block.