20000 Satoshi for Dummies

Let us say you had one legit $20 and one really 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 problem of looking at both of those invoices' serial 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'll explain in more detail below. .

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

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

1MB of transactions can theoretically be as small as 1 transaction (although this is not at all common) or a few 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 work, one is a matter of luck.

2) You must be the first miner to arrive at the right answer to a numeric issue. This process is also known as a proof of work.

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

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The bad news: Because it is guesswork, you need a lot of computing power in order to get there . To mine successfully, you need to get 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 just how much Bitcoin you can mine with your mining rig's hash rate, the website 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.  Resources Some miners--particularly Ethereum miners--purchase individual graphics cards (GPUs) as a low-cost way to cobble together mining operations.  The photograph below is a makeshift, home-made mining machine.  The graphics cards are such rectangular cubes with whirring circles.  Note the sandwich twist-ties holding the pictures cards to the metal rod.

Example: I tell three friends I'm thinking of a number between 1 and 100, and 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 must be the very first person to guess any number that's less than or equal to the number I'm thinking of.

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Let's say I'm thinking of the number 19. If Friend A guesses 21they shed because 21>19. If Friend B supposes 16 and Friend C supposes 12, then they've both theoretically arrived at workable answers, because 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 conditions, simultaneous 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%--that 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"guess what number I'm thinking of" question, however I'm not asking just 3 friends, and I am 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 ideal answer.

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

In order to understand these letters are doing in the center of numbers, let's unpack the term"hexadecimal."

As you know, we utilize the"decimal" system, which means it is base 10. This in turn means that every digit has 10 chances, 0-9.