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Let's say you had one legit $20 and one really good photocopy of that same $20. If someone were to attempt to spend both the real bill and the fake one, someone that took the trouble of looking at both of the bills' serial numbers would observe that they had been exactly the exact same number, and consequently one of them needed to be fictitious.

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

Once a miner has confirmed 1 MB (megabyte) worth of Bitcoin transactions, they are eligible to win the 12.5 BTC. The 1 MB limit was set by Satoshi Nakamoto, and is an issue 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 qualified to earn Bitcoin--not everyone who verifies 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 meet 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 right answer to some numeric issue. 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 difficult 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")  that is less than or equivalent 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 . To mine , you need to get a high"hash rate," that 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 could mine along with your mining rig's hash pace, 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--especially Ethereum miners--purchase individual graphics cards (GPUs) as go to this web-site a low-cost method to cobble together mining operations.  The photo below is a makeshift, home-made mining machine.  The graphics cards are such rectangular cubes with whirring circles.  Note the sandwich twist-ties holding the graphics cards into the metal pole.

ExampleI tell three friends 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 first person to figure any number that's less than or equal to the number I'm thinking of.

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Let's say I am thinking about 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's no"extra credit" for Friend B, even though B's answer was closer 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 determine by a simple majority--51 percent --that miner to honour. Typically, it is the miner that has done the work, i.e.

The losing block then becomes an"orphan block" .

Now imagine that I pose the"guess what number I'm thinking of" question, however I'm not asking only three friends, and I am not thinking of a number between 1 and 100. Rather, I am asking millions of would-be miners and I'm thinking about a 64-digit hexadecimal number. Now you see that it's 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 just of numbers, but also letters of this 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 is base 10. This in turn means that each and every digit has 10 chances, 0-9.