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Let us say you had one legit $20 and one quite good photocopy of that same $20. If someone were to attempt to spend both the real bill and the imitation one, someone that took the trouble of looking at both of those bills' consecutive numbers would see that they had been exactly the exact same number, and thus one of them had to be false.

This isn't a great 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 set by Satoshi Nakamoto, and can be a matter of controversy, as some miners think the block size ought to be increased to accommodate more information.

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

1MB of transactions can theoretically be as small as 1 transaction (though this is not in any way 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 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 may have heard that miners are solving difficult mathematical problems--that is not true at all. What they are doing is trying to be the first miner to think of a 64-digit hexadecimal number (a"hash")  which is less than or equal to the hash.

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The bad news: Because it is guesswork, you need a lot of computing power in order to get there . To mine , you need to get a high"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 could mine along with your mining rig's hash rate, the site Cryptocompare provides a very helpful calculator.

Either way 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 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 pictures cards into the metal rod.

Case in point : I tell three friends 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. you could try this out My friends don't have to guess the specific number, they just have to be the first person to figure any number that is less than or equal to this number I'm thinking of.

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Let us say I'm thinking of the number 19. If Friend A guesses 21, they lose because 21>19. If Friend B supposes 16 and Friend C supposes 12, then they've both theoretically arrived at workable answers, since 16<19 and 12<19. There is 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 at the end of the day there can only be one winning answer. When multiple simultaneous answers are presented which can be equivalent to or less than the target number, the Bitcoin network will determine by a simple majority--51%--that miner to honour. Normally, it is the miner that has done the most work, i.e. content

The losing block then becomes an"orphan block." .

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

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The number preceding has 64 digits. Easy enough to understand up to now. As you likely noticed, that number consists not only of click here to read 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 word"hexadecimal."

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