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In other words, it is a gamble. .

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

The reverse is also correct. If computational power has been taken from the network, the problem adjusts downward to earn mining simpler. .

"Say I tell three friends that I'm thinking of a number between 1 and 100, and I write that number on a piece of paper and seal it in an envelope. My friends don't need to guess the specific number, they simply must be the first person to guess any number that's less than or equal to this number I am thinking of.

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"Let us say I am thinking about the number 19. If Friend A guesses 21, they lose because 21>19. If Friend B supposes 16 and Friend C guesses 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 I present the'guess what number I'm thinking of' question, but I'm not asking only three friends, and I'm not thinking of a number between 1 and 100. Instead, I am asking millions of would-be miners and I'm thinking of a 64-digit hexadecimal number. Now you see that it is going to be extremely hard to guess the right answer." .

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If 1 in seven trillion doesn't sound difficult enough as is, here is the catch 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 perform it.

Since bitcoin mining is essentially guesswork, arriving at the ideal answer before another miner has almost everything to do with how fast your computer can produce hashes. Just a decade ago, bitcoin miners could be performed competitively on normal desktop computers. As time passes, however, miners realized that pictures cards commonly utilized 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 into the tens of thousands. .

Nowadays, bitcoin mining is so competitive it can only be done profitably using the most up-to-date ASICs. When using desktop computers, GPUs, or older models of ASICs, the expense of energy consumption actually surpasses 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." .

An mining pool is a group of miners who 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 also the massive network of users verifying transactions, one block of transactions is verified 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. 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 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 must be done in order to address scaling, there is less consensus about how can it. In the time of writing, there are two big 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 each block can store.

Solution 2 would deal with scaling by allowing for more information to be processed every 10 minutes. .

In July 2017, bitcoin miners and mining companies representing web roughly 80% to 90% of the networks computing power voted to incorporate a program that would reduce my review here the amount of information needed to confirm each block. In other words, they went with Solution 1.

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The app that miners voted to increase the bitcoin protocol is called a segregated witness, or SegWit. This expression is an amalgamation of Segregated, meaning to different, and Witness, which describes signatures on a bitcoin transaction. Segregated Witness, then, means to separate transaction signatures from a block and attach them as an extended block.