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

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

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

Note that I stated 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 technically be little as 1 transaction (although 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 work, one is a matter of luck.

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

The fantastic news: No advanced math or computation is involved. You might have discovered that miners are solving difficult mathematical problems--that is not true at all. What they're 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 target hash.

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The bad news: Since it is guesswork, you need a good deal of computing power in order to get there first. To mine , you need to get a higher"hash speed," which 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 just how much Bitcoin you can mine along with your mining rig's hash rate, 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--purchase individual graphics cards (GPUs) as a low-cost method to cobble together mining operations.  The photo below is a Get More Info makeshift, home-made mining machine.  The cards are such rectangular blocks with whirring circles.  Note the sandwich twist-ties holding the graphics cards into the metal rod.

Example: I tell three friends 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 have to guess the specific number, they just must be the first person to guess any number that's less than or equal to this number I am 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 supposes 16 and Friend C guesses 12, then they've both technically came 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 target answer of 19. .

In Bitcoin conditions, simultaneous answers happen frequently, but in 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 determine by a simple majority--51 percent --that miner to honour. Typically, it is the miner who has done the most work, i.e.

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

Now imagine I pose the"figure what number I'm thinking of" question, however I'm not asking only three friends, and I am not thinking of a number between 1 and 100. Rather, I am asking millions of would-be miners and I'm thinking about 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 above has 64 digits. Easy enough to understand up to now. As you probably noticed, that number consists not just of numbers, but also letters of the 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 each and every digit has 10 chances, 0-9.