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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 pc producing a hash beneath the goal is 1 in 7,184,404,942,701 less than 1 in 7 trillion. That level is adjusted every 2016 blocks, or roughly every 2 weeks, with the goal of keeping rates of mining constant.

The opposite is also correct. If computational power is taken from this network, the problem adjusts downward to make mining simpler. .

"Say I tell three friends that 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 have to guess the exact number, they just must be the 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 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 have 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 nearer to the target answer of 19. .

"Now imagine that I present the'guess what number I am thinking of' question, but 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 would-be miners and I am thinking of a 64-digit hexadecimal number. Now you see that it is 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 catch. Not only do bitcoin miners need to come up with the right hash, but they also have to be the first to perform 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. Only a decade ago, bitcoin miners could be performed competitively on normal desktops. Over time, however, miners recognized that graphics cards commonly utilized for video games were more capable of mining than desktops and graphics processing units (GPU) came to dominate the match.

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

Today, bitcoin mining is so aggressive it can only be done profitably using the most up-to-date ASICs. When using desktop computers, GPUs, or older versions of ASICs, the cost of energy consumption actually exceeds the revenue generated. Even with the newest unit at your disposal, one pc is seldom 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 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. .

Between 1 in 7 trillion odds, scaling difficulty levels, and the huge network of consumers verifying transactions, one block of transactions is verified roughly every 10 minutes. But 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. Since 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 issue at the heart of the bitcoin protocol is known as scaling. While bitcoin miners generally agree that something must be done to deal with scaling, there is less consensus about how do view it now it. In the time of writing, there are two big solutions to the scaling problem, either (1) to lower the amount of data needed to verify each block or (2) to increase the number of transactions that each block can save.

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

In July 2017, bitcoin miners and mining companies representing roughly 80% to 90% of their networks computing power required to incorporate a program that would reduce the amount of information needed to verify 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 called a segregated witness, or SegWit. This term is an amalgamation of Segregated, meaning to anchor different, and Witness, which describes signatures on a bitcoin transaction. Segregated Witness, then, means to separate transaction signatures from a block and join them within an extended block.