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In other words, it's a bet. .
The opposite 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 that 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 need to guess the exact number, they just must be the very first person to guess any number that is less than or equal to this number I am thinking of.
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"Let us say I'm thinking of the number 19. If Friend A guesses 21, they shed because 21>19. If Friend B guesses 16 and Friend C supposes 12, then they've both theoretically arrived at viable answers, because 16<19 and 12<19. There is 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'imagine what number I am thinking of' question, but I'm not asking just three friends, and I'm not thinking of a number between 1 and 100. Rather, I am asking millions of prospective 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 difficult enough as is, here's the catch to the grab. Not only do bitcoin miners have to come up with the right hash, but they also must be the very first to perform 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. As time passes, however, miners recognized that pictures cards commonly utilized for video games tend to be more capable of 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 competitive that it can only be done profitably using the most up-to-date ASICs. When using desktop computers, GPUs, or elderly versions of ASICs, the cost of energy consumption actually exceeds the revenue generated. Even with the newest unit available, one pc 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 high number of cubes are mined by pools rather than by individual miners. In July 2017, mining pools and companies represented approximately 80% to 90% of bitcoin computing power. .
Between 1 in 7 trillion odds, scaling difficulty levels, and the massive 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 target, 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 consumers 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. Even though 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 two major solutions to the scaling problem, either (1) to decrease the amount of data needed to confirm each block or (2) to increase the number of transactions that each block can save.
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 roughly 80% to 90 percent of their networks computing power required to incorporate a program that will decrease the amount of information needed to confirm each block. That is, they went with Solution 1.
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The program that miners voted to add to the bitcoin protocol is called a segregated witness, or SegWit. This term this hyperlink is an amalgamation of Segregated, meaning to separate, and Witness, which refers to signatures on a bitcoin transaction. Segregated Witness, then, means to separate transaction signatures from a block and join them within an extended block.