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In other words, it's a gamble. .
The reverse is also true. If computational power is taken off of the network, the problem adjusts downward to make mining easier. .
"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 have to guess the exact number, they just 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'm thinking about the number 19. If Friend A guesses 21, they lose because 21>19. If Friend B guesses 16 and Friend C supposes 12, then they've both technically came at viable answers, since 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 pose the'guess what number I am thinking of' question, but I am not asking only 3 friends, and I'm not thinking of a number between 1 and 100. Rather, I'm 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 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 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 create hashes. Just a decade ago, bitcoin miners could be carried out competitively on normal desktop computers. Over time, however, miners realized that graphics cards commonly used for video games tend to be 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 with all the most up-to-date ASICs. When using desktop computers, GPUs, or elderly versions of ASICs, the expense of energy consumption actually exceeds the revenue generated. Even with the newest unit available, one pc is seldom enough to compete with exactly 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 cubes 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 chances, scaling difficulty levels, and the massive network of consumers verifying transactions, one block of transactions is confirmed roughly every 10 useful site minutes. But its important to remember that 10 minutes is a target, 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, but the number of transactions made in 10 minutes will eventually exceed the number of transactions that can be processed in 10 minutes.
This dilemma at the heart of the bitcoin protocol is known as scaling. While bitcoin miners generally agree that something has to be done to deal with scaling, there is less consensus about how do it. In the time of writing, there are two big solutions to the scaling problem, either (1) to decrease the amount of information needed to confirm each block or (2) to increase the number of transactions that every 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 approximately 80% to 90 percent of the networks computing electricity required to incorporate a program that would decrease the amount of information needed to confirm each block. That is, they went with Solution 1.
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The app which miners voted to add to the bitcoin protocol is known as a segregated witness, or SegWit. This term 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 out of a block and attach them within an extended block.