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Let us say you had one legit $20 and one really good photocopy of that same $20. If someone were to try to spend both the real bill and the fake one, someone who took the trouble of looking at either of those bills' consecutive numbers would observe that they were the same number, and consequently one of them had to be false.

That isn't a great analogy--we will explain in more detail below. .

Once a miner has verified 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 a matter of controversy, as some miners believe the block size ought to be increased to accommodate more information.

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

1MB of transactions can theoretically be as 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 meet two conditions. One is a matter of effort, one is a matter of luck.

2) You have to be the first miner to arrive at the perfect answer to a numeric problem. This process is also known as an evidence of work.

The good news: No advanced math or computation is involved. You may have heard that miners are solving challenging mathematical problems--that is not true in any way. What they're 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 get a higher"hash rate," 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 with your mining rig's hash rate, find more info the site Cryptocompare offers 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--especially Ethereum miners--buy individual graphics cards (GPUs) as a cheap way to cobble together weblink mining operations.  The photo 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.

Case in point : I tell three friends that I'm thinking of 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 simply must be the very first person to guess any number that's less than or equal to this number I am thinking of.

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Let's say I am thinking about the number 19. If Friend A guesses 21they lose because 21>19. If Friend B guesses 16 and Friend C supposes 12, then they've both theoretically arrived at workable answers, because 16<19 and 12<19. There's no"extra credit" for Friend B, even though B's answer was nearer to the target answer of 19. .

In Bitcoin terms, 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 decide by a simple majority--51 percent --that miner to honour. Normally, it's the miner that has done the most 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'm not asking just three friends, and I'm not thinking of a number between 1 and 100. Rather, I am wikipedia reference asking millions of would-be miners and I am thinking about a 64-digit hexadecimal number. Now you see that it's going to be quite difficult to guess the ideal 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 this alphabet. Why is that

In order to understand these letters are doing in the middle of numbers, let us unpack the word"hexadecimal."

As you knowwe utilize the"decimal" system, which means it is base 10. This in turn means that every digit has 10 chances, 0-9.