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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 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 seven trillion. That level is adjusted every 2016 blocks, or about every 2 weeks, with the goal of keeping rates of mining constant.

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

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

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"Let us say I am 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 technically came at workable answers, since 16<19 and 12<19. There is no'extra credit' for Friend B, even though B's answer was closer to the target answer of 19. .

"Now imagine 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. Instead, I'm asking millions of prospective miners and I'm thinking about a 64-digit hexadecimal number. Now you see that it's going to be extremely difficult to guess the ideal answer." .

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If 1 in seven trillion doesn't sound difficult enough as is, here is the catch to the catch. Not only do bitcoin miners need to come up with the right hash, 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 almost everything to do with how fast your computer can produce hashes. Only a decade ago, bitcoin miners could be performed competitively on normal desktops. As time passes, however, miners realized that pictures cards commonly used for video games were more capable of mining than desktops and graphics processing units (GPU) came to dominate the match.

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

Today, bitcoin mining is so competitive that it can only be done profitably useful reference with the latest up-to-date ASICs. When using desktop computers, GPUs, or elderly versions of ASICs, the expense of energy consumption actually exceeds the revenue generated. Even with the newest unit at your disposal, one pc 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 split the mined bitcoin between participants. A disproportionately large number of cubes 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 chances, scaling difficulty levels, and the huge network of consumers verifying transactions, one block of transactions is confirmed roughly every 10 minutes. But its important to keep in mind that 10 minutes is a goal, 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. 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. While bitcoin miners generally agree that something has to be done to deal with 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 data needed to confirm each block or (2) to increase the number of transactions that each block can save.

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

In July 2017, bitcoin miners and mining companies representing approximately 80% to 90 percent of the networks computing power voted to incorporate a program that would decrease the amount of data 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 out of a block and attach them as an extended block.