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Let us say you had one legit $20 and one quite good photocopy of that same $20. If someone were to try to spend both the real bill and the imitation one, someone that took the problem of looking at both of those invoices' serial numbers would observe that they were exactly the same number, and thus one of them had to be fictitious.

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 set by Satoshi Nakamoto, and is a matter of controversy, as some miners believe the block size should be increased to accommodate more information.

Note that I stated 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 small as 1 transaction (although this is not in any way 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 have to be the first miner to reach the perfect answer to some 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 discovered that miners are solving difficult mathematical problems--that's not true in any way. What they're actually doing is trying to be the first miner to come up with a 64-digit hexadecimal number (a"hash")  which 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 successfully, you need to have a high"hash speed," 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 along with your mining rig's hash pace, the site Cryptocompare provides 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 cheap way to cobble together mining operations.  The photo below is a makeshift, home-made mining machine.  The graphics cards are those rectangular blocks with whirring circles.  Note the sandwich twist-ties holding the pictures cards to the metal rod.

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 need to guess the specific number, they just have to be the first person to figure any number that's less than or equal to this number I'm thinking of.

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Let's say I am 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 have both technically came at viable answers, since 16<19 and 12<19. There's no"extra credit" for Friend B, even though B's answer was closer to the goal answer of 19. .

In Bitcoin visit homepage conditions, simultaneous answers happen 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 determine by a simple majority--51%--which miner to honour. Normally, it is the miner that 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, but I am not asking only three friends, and I am not thinking of a number between 1 and 100. Rather, I'm asking millions of prospective miners and I am thinking about a 64-digit hexadecimal number. Now you see that it's going to be extremely hard to guess the ideal answer.

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The number preceding has 64 digits. Easy enough to understand so far. As you likely noticed, that number consists not only 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 word"hexadecimal."

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