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Let us 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 trouble of looking at either of those bills' consecutive numbers would see that they had been exactly the exact same number, and consequently one of them had to be false.

That isn't a great 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 worth of transactions makes a miner qualified to earn Bitcoin--not everyone who verifies transactions will receive paid out.

1MB of transactions can theoretically be as little as 1 transaction (though this is not at all 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 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 might have heard that miners are solving challenging mathematical problems--that's 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 hash.

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The bad news: Since it is guesswork, you need a good deal of computing power in order to get there first. To mine successfully, you need to have a higher"hash rate," 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 just how much Bitcoin you can mine my explanation along with your mining rig's hash rate, the website Cryptocompare offers a very 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--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 cards are such rectangular blocks with whirring circles.  Note the see here sandwich twist-ties holding the pictures cards into the metal rod.

Case in point : I 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 need to guess the exact number, they just must be the first person to guess 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 shed because 21>19. If Friend B supposes 16 and Friend C guesses 12, then they have both theoretically arrived at viable answers, because 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 occur frequently, but in 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 --that miner to honour. Normally, it's the miner who 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 pose the"figure what number I'm thinking of" question, however I'm not asking just three friends, and I'm not thinking of a number between 1 and 100. Instead, I'm asking millions of would-be miners and I'm thinking of a 64-digit hexadecimal number. anonymous Now you see that it is 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 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 word"hexadecimal."

As you know, we use the"decimal" system, which means it is base 10. This in turn means that every digit has 10 possibilities, 0-9.

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