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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 try to spend both the real bill and the imitation one, someone that took the trouble of looking at both of the invoices' consecutive numbers would see that they had been exactly the exact same number, and thus one of them needed to be fictitious.

This isn't a great analogy--we'll explain in more detail below. .

Once a miner has verified 1 MB (megabyte) worthiness of Bitcoin transactions, they are entitled to win the 12.5 BTC. The 1 MB limit was set by Satoshi Nakamoto, and is an issue 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 worth 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 at all common) or a few thousand. It depends on how much data the transactions consume.

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 must be the first miner to arrive at the right answer to a numeric issue. This process is also known as an evidence of work.

The fantastic news: No advanced math or computation is involved. You might have discovered that miners are solving difficult mathematical problems--that is 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 equal to the 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 have 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 just how much Bitcoin you can mine with your mining rig's hash rate, 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 into the tens of thousands.  Some miners--especially Ethereum miners--purchase individual graphics cards (GPUs) as a low-cost method to cobble together mining operations.  The photo below is a makeshift, home-made mining machine.  The cards are such rectangular blocks with whirring circles.  Note the sandwich twist-ties holding the graphics cards into the metal pole.

Case in point : I tell three friends I'm thinking about 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 have to be the very first person to figure any number that is less than or equal to this number I am thinking of.

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Let's say I'm thinking of the number 19. If Friend A guesses 21they shed because 21>19. If Friend B supposes 16 and Friend C supposes 12, then they have both technically came at viable 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. . look at here

In Bitcoin conditions, simultaneous answers happen 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 decide by a simple majority--51 percent --which miner to honour. Typically, it's the miner who has done the 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, however I am not asking just three friends, and I am not thinking of a number between 1 and 100. Instead, I'm asking millions of prospective miners and I'm thinking of a 64-digit hexadecimal number. Now you see that it's going to be extremely hard to guess the right answer.

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The number preceding has 64 digits. Easy enough to understand so far. As you probably noticed, that number consists not only of numbers, but also letters of this 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 know, we utilize the"decimal" system, which means it's base 10. This in turn means that every digit has 10 chances, 0-9.