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In other words, it's a bet. .
The reverse is also correct. If computational power has been taken from the network, the difficulty adjusts downward to make mining simpler. .
"Say I tell three friends that I'm thinking about a number between 1 and 100, and 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 have to be the very 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 of 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 viable 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 I pose the'guess what number I'm thinking of' question, but I'm 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 is going to be extremely hard to guess the right answer." .
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If 1 in 7 trillion doesn't sound difficult enough as is, here's the grab to the catch. Not only do bitcoin miners have to think of the ideal hash, they also must be the first to perform it.
Since 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. Just a decade ago, bitcoin miners could be carried out 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 to the tens of thousands. .
Nowadays, bitcoin mining is so competitive that it can only be done profitably with all the latest up-to-date ASICs. When using desktop computers, GPUs, or older versions of ASICs, the cost of energy consumption actually surpasses the revenue generated. Even with the newest unit available, one pc is seldom enough to compete with what what miners call"mining pools" .
A mining pool is a group of miners who combine their computing power 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 chances, scaling difficulty levels, and also the huge network of consumers verifying transactions, one block of transactions is confirmed 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 each 10 minutes. As the network of bitcoin consumers continues to grow, but the number of transactions made in 10 minutes will eventually exceed the number of transactions which can be processed in 10 minutes.
This dilemma at the heart of the bitcoin protocol see this is known as scaling. straight from the source Even though bitcoin miners generally agree that something must be done to deal with scaling, there is less consensus regarding how do 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 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 each 10 minutes. .
In July 2017, bitcoin miners and mining companies representing roughly 80% to 90% of their networks computing power voted to incorporate a program that will decrease the amount of data 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 called a segregated witness, or SegWit. This term 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 out of a block and join them as an extended block.