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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 attempt to spend both the true bill and the fake one, someone who took the problem of looking at both of the bills' serial numbers would observe that they were the same number, and consequently one of them needed to be fictitious.

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

Once a miner has confirmed 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 can be a matter of controversy, as some miners think the block size should be increased to accommodate more data.

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

1MB of transactions can technically be small as 1 transaction (though this is not in any way common) or several thousand. It depends on how much information the transactions take up.

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

2) You have to be the first miner to reach the perfect answer to a numeric issue. This practice is also known as an evidence of work.

The fantastic news: No advanced math or computation is involved. You may have discovered that miners are solving challenging mathematical problems--that's not true in any way. What they are doing is trying to be the first miner to think of a 64-digit hexadecimal number (a"hash")  that is less than or equivalent to the target hash.

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The bad news: Since it's guesswork, you need a good deal of computing power in order to get there . To mine , you need to have a high"hash speed," that 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 along with your mining rig's hash pace, the site Cryptocompare provides a 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--particularly Ethereum miners--buy individual graphics cards (GPUs) as a cheap way to cobble together mining operations.  The photograph below is a makeshift, home-made mining machine.  The cards are such rectangular blocks with whirring circles.  Note the sandwich twist-ties holding the pictures cards to the metal pole.

ExampleI tell three friends I'm thinking of 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 simply must be the very first person click site to guess any number that is less than or equal to this number I am thinking of.

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Let's say I'm 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've 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 conditions, simultaneous answers occur 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 decide by a simple majority--51%--which miner to honour. Normally, it's 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 am not asking just three friends, and I'm not thinking of a number between 1 and 100. Rather, I'm 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 right here answer.

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The number above 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 the 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 utilize the"decimal" system, which means it's base 10. This in turn means that every digit has 10 possibilities, 0-9.