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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 try to spend both the real bill and the fake one, someone who took the trouble of looking at both of those invoices' consecutive numbers would see that they were the exact same number, and consequently one of them needed to be false.

That isn't a great analogy--we will 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 is an issue of controversy, as some miners believe 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 out.

1MB of transactions can technically be little as 1 transaction (although this is not at all common) or a few thousand. It depends on how much data the transactions take up.

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 must be the first miner to reach the right answer to a numeric problem. This practice 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 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")  that is less than or equal to the hash.

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The bad news: Because it is guesswork, you need a lot of computing power in order to get there first. To mine , you need to have a high"hash rate," which is measured 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 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 pole.

Example: I tell three friends I'm thinking of redirected here 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 exact number, they just have to be the very first person to figure any number that's less than or equal to this number I'm thinking of.

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Let us say I am thinking about the number 19. If Friend A guesses 21, they shed because 21>19. If Friend B guesses 16 and Friend C supposes 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 nearer to the goal answer of 19. .

In Bitcoin terms, simultaneous answers occur frequently, but at the end of the day there can only be one winning answer. When multiple simultaneous answers are presented that are equal to or less than the target number, the Bitcoin network will decide by a simple majority--51%--that miner to honour. More about the author Typically, it is the miner who 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, however I am not asking only look at this web-site 3 friends, and I am not thinking of a number between 1 and 100. Rather, I am asking millions of prospective miners and I'm thinking about a 64-digit hexadecimal number. Now you see that it's going to be extremely hard to guess the right answer.

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The number preceding has 64 digits. Easy enough to understand up to now. As you likely 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 center of numbers, let us unpack the term"hexadecimal."

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