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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 just 1 in 7,184,404,942,701 less than 1 in seven trillion. That amount is corrected every 2016 blocks, or roughly every 2 weeks, with the goal of keeping rates of mining constant.

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

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

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"Let us say I'm 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've both technically came at workable answers, because 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 that I pose the'guess what number I am thinking of' question, however I am not asking only 3 friends, and I am not thinking of a number between 1 and 100. Rather, I'm asking millions of would-be miners and I'm thinking of a 64-digit hexadecimal number. Now you see that it's going to be quite difficult to guess the right answer." .

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If 1 in 7 trillion doesn't sound hard enough as is, here is the grab to the catch. Not only do bitcoin miners have 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 everything to do with how fast your computer can produce hashes. Only a decade ago, bitcoin miners can be performed competitively on normal desktops. As time passes, however, miners recognized 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. .

Nowadays, bitcoin mining is so aggressive it can only be done profitably using the most up-to-date ASICs. When using desktop computers, GPUs, or elderly versions of ASICs, the expense of energy consumption actually surpasses the revenue generated. Even with the newest unit available, 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 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 huge network of users verifying transactions, one block of transactions is confirmed roughly every 10 minutes. But 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 every 10 minutes. Since the network of bitcoin consumers continues to grow, however, the number of click to investigate transactions made in 10 minutes will eventually exceed the number of transactions that can be processed in 10 minutes.

This dilemma at the center of the bitcoin protocol is known as scaling. Even though bitcoin miners generally agree that something must be done to deal with scaling, there is less consensus about how do 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 every block can store.

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

In July 2017, bitcoin miners and mining companies representing roughly 80% to 90% of the networks computing electricity voted to incorporate a program that will reduce the amount of data needed to verify each block. That is, they went with Solution 1.

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The program which miners voted to add to the bitcoin protocol is called a segregated witness, or SegWit. This expression is an amalgamation of Segregated, meaning to separate, and Witness, which describes signatures on a bitcoin transaction. Segregated Witness, then, means to separate transaction signatures out of a block and attach them within an extended block.