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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. In other words, the chance of a pc 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 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 off of the network, the difficulty adjusts downward to make mining easier. .

"Say I tell three friends I'm thinking about 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 guess any number that is less than or equal to the number I am thinking of.

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"Let's say I'm thinking about the number 19. If Friend A guesses 21they shed because 21>19. If Friend B supposes 16 and Friend C guesses 12, then they have both theoretically arrived at workable answers, since 16<19 and 12<19. There's no'extra credit' for Friend B, even though B's answer was nearer to the goal answer of 19. .

"Now imagine I present the'imagine 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. Instead, 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 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 grab to the grab. Not only do bitcoin miners need to come up with the right hash, they also have to be the first to do 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. Just a decade ago, bitcoin miners could be performed competitively on normal desktop computers. Over time, however, miners realized that graphics cards commonly used for video games were more effective at mining than desktops and graphics processing units (GPU) came to dominate the game.

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

Today, bitcoin mining is so aggressive it can only be done profitably with all the latest 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 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 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 approximately 80% to anonymous 90 percent 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 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, however, 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 in order to deal with scaling, there is less consensus about how can it. At the time of writing, there are two big solutions to this scaling problem, either (1) to decrease the amount of data needed to confirm each block or (2) to increase the number of transactions that every block can store.

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

In July 2017, bitcoin miners and mining companies representing approximately 80% to 90% of their 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 that miners voted to increase the bitcoin protocol is known as a segregated witness, or SegWit. This term 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 from a block and attach them within an extended block.