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Let us 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 imitation one, someone that took the trouble of looking at either of the invoices' consecutive numbers would observe that they were exactly the same number, and thus one of them needed to be false.

This isn't a great analogy--we will 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 can be a matter of controversy, as some miners believe the block size ought to be increased to accommodate more data.

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

1MB of transactions can theoretically be as little as 1 transaction (although this is not at all common) or a few thousand. It depends on how much data the transactions take up.

In order to earn Bitcoin, you need to fulfill 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 right answer to some numeric problem. This process is also known as a proof of work.

The good 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'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 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 get a high"hash speed," 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 how much Bitcoin you could mine with your mining rig's hash pace, the site Cryptocompare offers a 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 way to cobble together mining operations.  The photo below is a makeshift, home-made mining machine.  The cards are such rectangular cubes with whirring circles.  Note the sandwich twist-ties holding the graphics cards to the metal pole.

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 very first person to figure any number that is less than or equal to this number I'm thinking of.

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Let's say I'm thinking of the number 19. If Friend A guesses 21, they lose because 21>19. If Friend B guesses 16 and Friend C supposes 12, then they have 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 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 equivalent to or less than the target number, the Bitcoin network will determine by a simple majority--51 percent --which miner to honour. Normally, it is the miner that has done the most work, i.e.

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The losing block then becomes an"orphan block" .

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Now imagine I present the"guess what number I am thinking of" question, however I'm not asking just three friends, and I am not Read More Here thinking of a number between 1 and 100. Rather, I'm asking millions of would-be miners and I'm thinking of a 64-digit hexadecimal number. Now you see that it's going to be extremely difficult to guess the right answer.

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The number preceding has 64 digits. Easy enough to understand so far. As you likely noticed, that number consists not only of numbers, but also letters of the 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 know, we use the"decimal" system, click here to find out more which means it's base 10. This in turn means that every digit has 10 possibilities, 0-9.

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