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Let's 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 imitation one, someone that took the problem of looking at either of those bills' serial numbers would observe that they were exactly the exact same number, and thus one of them needed to be fictitious.

That isn't a perfect 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 can be a matter of controversy, as some miners believe 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 supports transactions will receive paid out.

1MB of transactions can technically be small as 1 transaction (though this is not in any way 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 perfect answer to some 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 discovered that miners are solving challenging mathematical problems--that is not true at all. What they are actually doing is trying to be the first miner to think of a 64-digit hexadecimal number (a"hash")  which is less than or equivalent to the target hash.

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The bad news: Since it's guesswork, you need a lot of computing power in order to get there . To mine successfully, you need to have a high"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 how much Bitcoin you can mine with your mining rig's hash pace, the site Cryptocompare provides a helpful calculator.

Either way click reference 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--buy individual graphics cards (GPUs) as a cheap way to cobble together mining operations.  The photograph below is a makeshift, high-tech mining machine.  The graphics cards are those rectangular cubes with whirring circles.  Note the sandwich twist-ties holding the pictures cards into the metal rod.

ExampleI 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 exact number, they just have to be the very first person to figure any number that is less than or equal to this number I am thinking of.

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Let us say I'm thinking of the number 19. If Friend A guesses 21they lose because 21>19. If Friend B guesses 16 and Friend C guesses 12, then they have both technically came at viable answers, since 16<19 click for source 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 terms, 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 equal to or less than the target number, the Bitcoin network will decide by a simple majority--51 percent --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 I pose the"figure what number I am 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 prospective miners and I am thinking of a 64-digit article hexadecimal number. Now you see that it is going to be quite hard to guess the ideal answer.

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The number above 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 these letters are doing in the center of numbers, let's unpack the term"hexadecimal."

As you knowwe use the"decimal" system, which means it's base 10. This in turn means that each and every digit has 10 chances, 0-9.