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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 attempt to spend both the true bill and the imitation one, someone that took the problem of looking at both of the bills' serial numbers would see that they were the 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 verified 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 a matter of controversy, as some miners think the block size ought to be increased to accommodate more information.

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

1MB of transactions can technically be little as 1 transaction (though this is not in any way common) or several thousand. It depends on how much information 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 have to be the first miner to reach the perfect answer to a numeric issue. This practice is also known as a proof of work.

The fantastic news: No advanced math or computation is involved. You may have heard that miners are solving difficult mathematical problems--that's not true at all. What they're doing is trying to be the first miner to come up with a 64-digit hexadecimal number (a"hash")  that 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 first. To mine successfully, you need to get a higher"hash speed," which 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 way a GPU (graphics processing unit) miner or an application-specific integrated circuit (ASIC) miner. These can run from $500 to the tens of thousands.  Some miners--especially Ethereum miners--buy individual graphics cards (GPUs) as a cheap way to cobble together mining operations.  The photograph 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 to the metal rod.

Case in point : I tell three friends that 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 specific number, they just have to be the very first person to figure any number that is less than or equal to the number I am thinking of.

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Let's say I'm thinking about the number 19. If Friend A guesses 21they shed because 21>19. If Friend B supposes 16 and Friend C supposes 12, then they've both theoretically arrived at workable answers, because 16<19 and 12<19. There's no"extra credit" for Friend B, even though B's answer was closer to the goal 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%--which miner to honour. Normally, it's the miner that has done the work, i.e.

The losing block then becomes an"orphan block" .

Now imagine that I present the"figure 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. Instead, I'm 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 hard to guess the right answer.

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The number preceding has 64 digits. Easy enough to click to find out more understand up to now. As you likely noticed, that number consists not only of numbers, but visit the website also letters of the alphabet. Why is that

In order to understand what 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 each and every digit has 10 chances, 0-9.