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

This isn't a great analogy--we will 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 established 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 said that verifying 1 MB worth of transactions makes a miner qualified 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 several thousand. It depends on how much data the transactions take up.

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

2) You have to 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 heard that miners are solving challenging 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")  which is less than or equivalent 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 . To mine successfully, you need to get a higher"hash rate," 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 could mine with your mining rig's hash rate, the website Cryptocompare provides a very helpful calculator.

Either way a GPU (graphics processing unit) miner or an browse this site application-specific integrated circuit (ASIC) miner. These can run from $500 into 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 below is a makeshift, high-tech mining machine.  The cards are such rectangular cubes with whirring circles.  Note the sandwich twist-ties holding the pictures cards into the metal rod.

Case in point I tell three friends that I'm thinking about 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 just have to be the first person to figure any number that is less than or equal to the number I'm thinking of.

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Let us say I'm thinking about the number 19. If Friend A guesses 21, they lose because 21>19. If Friend B guesses 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 nearer to the target 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 go to these guys presented that are equal to or less than the target number, the Bitcoin network will decide by a simple majority--51 percent --that miner to honour. Normally, it is the miner who has done the work, i.e.

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

Now imagine I pose the"guess what number redirected here I'm thinking of" question, however I am not asking only 3 friends, and I'm not thinking of a number between 1 and 100. Rather, I am asking millions of prospective miners and I am thinking of a 64-digit hexadecimal number. Now you see that it's going to be quite difficult to guess the right answer.

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The number preceding 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 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 possibilities, 0-9.