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Let's say you had one legit $20 and one quite good photocopy of that same $20. If someone were to try to spend both the true bill and the imitation one, someone who took the trouble of looking at both of those invoices' serial numbers would see that they were the exact same number, and consequently one of them needed to be fictitious.

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

Once a miner has confirmed 1 MB (megabyte) worthiness of Bitcoin transactions, they are entitled to win the 12.5 BTC. The 1 MB limit was established by Satoshi Nakamoto, and can be an issue of controversy, as some miners think the block size should 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 little 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 fulfill two conditions. One is a matter of effort, one is a matter of luck.

2) You have to be the first miner to arrive at the right answer to some numeric issue. This practice 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 challenging mathematical problems--that's not true in any way. What they are 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: Since it is guesswork, you need a lot of computing power in order to get there first. great post to read To mine successfully, you need to get a high"hash rate," 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 just how much Bitcoin you can mine along 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--particularly Ethereum miners--purchase individual graphics cards (GPUs) as a cheap way to cobble together mining operations.  The photo below is a makeshift, home-made mining machine.  The graphics cards are those rectangular cubes with whirring circles.  Note the sandwich twist-ties holding the graphics cards into the metal pole.

Example: I tell three friends I'm thinking of a number between 1 and 100, and I write that number on a sheet of paper and seal it in an envelope. My friends don't need to guess the specific number, they just have to be the first person to guess any number that's less than or equal to this 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 guesses 12, then they have both technically came at viable answers, because check over here 16<19 and 12<19. There's no"extra credit" for Friend B, even though B's answer was nearer to the goal answer of 19. .

In Bitcoin conditions, 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. Typically, it's the miner who has done the work, i.e.

The losing block then becomes an"orphan block" .

Now imagine I present go to the website the"figure what number I'm thinking of" question, however I'm not asking just three friends, and I am not thinking of a number between 1 and 100. Rather, I'm asking millions of prospective miners and I am thinking of a 64-digit hexadecimal number. Now you see that it is going to be quite hard to guess the ideal answer.

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The number preceding has 64 digits. Easy enough to understand up to now. As you probably noticed, that number consists not just of numbers, but also letters of the alphabet. Why is that

In order to understand these letters are doing in the middle of numbers, let us unpack the word"hexadecimal."

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