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Let's say you had one legit $20 and one really good photocopy of that same $20. If someone were to attempt to spend both the real bill and the imitation one, someone who took the trouble of looking at both of the bills' consecutive numbers would observe that they had been the exact same number, and thus one of them had to be false.

That isn't a great analogy--we'll explain in more detail below. .

Once a miner has verified 1 MB (megabyte) worthiness of Bitcoin transactions, they are entitled to win the 12.5 BTC. The 1 MB limit was established by Satoshi Nakamoto, and can be a matter of controversy, as some miners think the block size ought to be increased to accommodate more information.

Note that I stated that verifying 1 MB worth of transactions makes a miner eligible to earn Bitcoin--not everyone who supports transactions will get paid off.

1MB of transactions can technically be small as 1 transaction (although this is not at all common) or several thousand. It depends on how much data the transactions consume.

In order to earn Bitcoin, you need to fulfill two conditions. One is a matter of work, one is a matter of luck.

2) You must be the first miner to arrive at the perfect answer to some numeric issue. This process is also known as an evidence of work.

The good news: No advanced math or computation is involved. You might have discovered that miners are solving difficult mathematical problems--that's not true in any way. What they are actually doing is trying to be the first miner to think of a 64-digit hexadecimal number (a"hash")  which is less than or equal to the target hash.

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The bad news: Since it's guesswork, you need a lot of computing power in order to get there . To mine , you need to get a high"hash speed," which is quantified in terms of megahashes per second (MH/s), gigahashes per second (GH/s), and terahashes per second (TH/s).

If you want to estimate how much Bitcoin you could mine with your mining rig's hash rate, the site Cryptocompare offers a helpful calculator.

Either way a GPU (graphics processing unit) image source miner or an application-specific integrated circuit (ASIC) miner. These can run from $500 into the tens of thousands.  Some miners--particularly Ethereum miners--buy individual graphics cards (GPUs) as a cheap way to cobble together mining operations.  The photo below is a makeshift, high-tech mining original site machine.  The graphics cards are such rectangular blocks with whirring circles.  Note the sandwich twist-ties holding the graphics cards into the metal pole.

Case in point I tell three friends I'm thinking about a number between 1 and 100, and that I write that number on a piece of paper and seal it in an envelope. My friends don't have to guess the specific number, they simply have to be the first person to figure 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 about the number 19. If Friend A guesses 21, they lose because 21>19. If Friend B supposes 16 and Friend C guesses 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 nearer to the goal answer of 19. .

In Bitcoin terms, simultaneous answers happen frequently, but in the end of the day there can only be one winning answer. When multiple simultaneous answers are presented which can be equivalent to or less than the target number, the Bitcoin network will decide by a simple majority--51 percent --that miner to honour. Typically, it's the miner that has done the most work, i.e.

The losing block then becomes an"orphan block" .

Now imagine that I present the"guess what number I'm thinking of" question, but I'm not click here for info asking just 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's going to be quite difficult to guess the ideal answer.

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The number preceding has 64 digits. Easy enough to understand up to now. As you probably noticed, that number consists not just of numbers, but also letters of this alphabet. Why is that

In order to understand what these letters are doing in the middle of numbers, let us unpack the term"hexadecimal."

As you knowwe utilize the"decimal" system, which means it's base 10. This in turn means that each and every digit has 10 possibilities, 0-9.