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Let's say you had one legit $20 and one really good photocopy of the 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 see that they were exactly the exact same number, and thus one of them had to be false.

That isn't a perfect analogy--we will explain in more detail below. .

Once a miner has confirmed 1 MB (megabyte) worthiness of Bitcoin transactions, they are entitled 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 should be increased to accommodate more data.

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

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

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

2) You have to be the first miner to reach the right answer to a numeric problem. This process is also known as an evidence of work.

The fantastic news: No advanced math or computation is involved. You might have heard 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 come up with a 64-digit hexadecimal number (a"hash")  that is less than or equal to the target hash.

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The bad news: Because it is guesswork, you need a good deal of computing power in order to get there first. To mine , you need to have a high"hash speed," that 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 along with your mining rig's hash pace, the site Cryptocompare offers a very helpful calculator.

Either way a GPU (graphics processing unit) miner or an application-specific integrated circuit (ASIC) miner. These can run from $500 to the tens of thousands.  Some miners--especially Ethereum miners--buy individual graphics cards (GPUs) as a low-cost method to cobble together mining operations.  The photograph a fantastic read below is a makeshift, home-made mining machine.  The graphics cards are those rectangular blocks with whirring you can try this out circles.  Note the sandwich twist-ties holding the graphics cards to the metal rod.

Case in point I tell three friends that I'm thinking of 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 specific number, they simply have to be the first person to guess any number that is less than or equal to this number I'm thinking of.

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Let's 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 have both theoretically arrived at workable answers, since 16<19 and 12<19. There is no"extra credit" for Friend B, even though B's answer was closer to the goal answer of 19. .

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

The losing block then becomes an"orphan block." .

Now imagine that I pose the"figure what number I'm thinking of" question, however I am not asking just 3 friends, and I'm not thinking of a number between 1 and 100. Instead, I am asking millions of would-be 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 right answer.

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The number preceding has 64 digits. Easy enough to understand so far. 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's unpack the term"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.