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Let's say you had one legit $20 and one quite good photocopy of the same $20. If someone were to try to spend both the true bill and the fake one, someone who took the trouble of looking at either of the bills' consecutive numbers would observe that they were exactly the same number, and consequently one of them needed to be false.

This isn't a great analogy--we will explain in more detail below. .

Once a miner has confirmed 1 MB (megabyte) worth of Bitcoin transactions, they are eligible to win the 12.5 BTC. The 1 MB limit was set by Satoshi Nakamoto, and is a matter of controversy, as some miners think the block size ought to be increased to accommodate more data.

Note that I said that verifying 1 MB worth of transactions makes a miner qualified to earn Bitcoin--not everyone who verifies transactions will get paid out.

1MB of transactions can technically be little 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 reach the perfect answer to a numeric problem. This process is also known as a proof of work.

The good news: No advanced math or computation is involved. You might have heard that miners are solving difficult mathematical problems--that's not true at all. What they're actually doing is trying to be the first miner to come up with a 64-digit hexadecimal number (a"hash")  that is less than or equal to the hash.

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

If my link you want to estimate how much Bitcoin you could mine with your mining rig's hash pace, the website Cryptocompare provides a very helpful calculator.

Either a GPU (graphics processing unit) 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, home-made mining machine.  The cards are those rectangular blocks with whirring circles.  Note the sandwich twist-ties holding the pictures cards into the metal rod.

Case in point I tell three friends that I'm thinking of 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 need to guess the specific number, they simply must be the very first person to figure 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 21, they lose because 21>19. If Friend B supposes 16 and Friend C supposes 12, then they've both theoretically arrived at workable find out 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. .

In Bitcoin conditions, simultaneous informative post answers occur frequently, but at 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 --which miner to honour. Typically, it is the miner who has done the work, i.e.

The losing block then becomes an"orphan block" .

Now imagine that I pose the"figure what number I am thinking of" question, however I am not asking only three friends, and I'm not thinking of a number between 1 and 100. Instead, I am asking millions of would-be miners and I'm thinking of a 64-digit hexadecimal number. Now you see that it's going to be extremely difficult to guess the right answer.

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

In order to understand these letters are doing in the center of numbers, let us unpack the word"hexadecimal."

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