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Let's say you had one legit $20 and one really good photocopy of the same $20. If someone were to attempt to spend both the real bill and the fake one, someone who took the problem of looking at both of those invoices' consecutive numbers would observe that they had been the same number, and thus one of them had to be fictitious.

That 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 eligible to win the 12.5 BTC. The 1 MB limit was established 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 stated that verifying 1 MB worth of transactions makes a miner eligible to earn Bitcoin--not everyone who supports transactions will get paid off.

1MB of transactions can theoretically be as small as 1 transaction (although this is not in any way common) or several thousand. It depends on how much data the transactions take up.

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 must be the first miner to reach the right answer to a numeric issue. This practice 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're doing is trying to be the first miner to come up with 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 first. To mine successfully, you need to get a high"hash speed," 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 how much Bitcoin you could mine along with your mining rig's hash pace, the site Cryptocompare provides a helpful calculator.

Either way a GPU (graphics processing unit) miner or an application-specific integrated circuit (ASIC) click site miner. These can run from $500 into the tens of thousands.  Some miners--particularly Ethereum miners--purchase individual graphics cards (GPUs) as a cheap method to cobble together mining operations.  The photograph 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 to the metal pole.

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 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 this number I am thinking of.

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Let us say I am thinking of 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've both theoretically arrived at viable 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 conditions, simultaneous answers occur frequently, but at 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%--which miner to honour. Normally, it's the miner that 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 that I pose the"guess what number I am thinking of" question, however I am not asking only 3 friends, and I am not navigate to this site thinking of a number between 1 and 100. Rather, I'm asking millions of would-be 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 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 word"hexadecimal."

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

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