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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 target is just 1 in 7,184,404,942,701 less than 1 in seven trillion. That amount is corrected every 2016 cubes, or roughly every two weeks, with the goal of keeping rates of mining constant.

The opposite is also correct. If computational power is taken off of this network, the problem 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 have to guess the specific number, they just have to be the very first person to figure any number that's less than or equal to the number I'm thinking of.

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"Let's say I am thinking of the number 19. If Friend A guesses 21they lose because 21>19. If Friend B guesses 16 and Friend C guesses 12, then they have both technically came at viable 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 I pose the'imagine what number I am thinking of' question, however I am not asking just 3 friends, and I am 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's going to be extremely difficult to guess the ideal answer." .

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If 1 in 7 trillion doesn't sound hard enough as is, here's the grab to the grab. 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 ideal answer before another miner has everything to do with how fast your computer can produce hashes. Only a decade ago, bitcoin miners could be performed competitively on normal desktops. Over time, however, miners realized that graphics 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 with 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 pc is seldom enough to compete with exactly what miners call"mining pools." .

An mining pool is a group of miners that combine their computing ability and split 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 roughly 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. However, its important to remember 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 users continues to grow, but the number of transactions made in 10 minutes will eventually exceed the number of transactions which 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 has to be done in order to address scaling, there is less consensus about how can it. In the time of writing, there are view it now two big solutions to this scaling problem, either (1) to lower the amount of information needed to confirm each block or (2) to increase the number of transactions that every block can store.

Solution 2 will deal 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% of their networks computing electricity required to incorporate a program that would reduce the amount of information needed to confirm each block. In other words, they went with Solution 1.

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The program 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 linked here on a bitcoin transaction. Segregated Witness, then, means to separate transaction signatures out of a block and join them useful source as an extended block.