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Let's say you had one legit $20 and one really good photocopy of that same $20. If someone were to try to spend both the true bill and the fake one, someone that took the problem of looking at either of those invoices' serial numbers would observe that they had been the same number, and consequently one of them needed to be fictitious.

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

Once a miner has confirmed 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 said that verifying 1 MB worth of transactions makes a miner eligible to earn Bitcoin--not everyone who verifies transactions will get paid off.

1MB of transactions can technically be little as 1 transaction (although this is not at all common) or several 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 reach the right answer to some numeric problem. This practice is also known as an evidence of work.

The fantastic news: No advanced math or computation is involved. You might have heard that miners are solving challenging mathematical problems--that is not true in any way. What they're actually 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: Since it is guesswork, you need a good deal of computing power in order to get there first. To mine , you need to get 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 could mine with your mining rig's hash pace, the website Cryptocompare provides a helpful calculator.

Either 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--particularly Ethereum miners--purchase individual graphics cards (GPUs) as a cheap method to cobble together mining operations.  The photograph below is a makeshift, high-tech mining machine.  The graphics cards are those rectangular blocks with whirring circles.  Note the sandwich twist-ties holding the pictures cards to the metal pole.

Example: I tell three friends that I'm thinking of a number between 1 and 100, and that I write that number on a sheet of paper and seal it in an visit homepage envelope. My friends find more information don't need to guess the specific number, they simply have to be the first person to guess any number that's less than or equal to this number I am thinking of.

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Let's say I am 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 have both theoretically arrived at workable answers, because 16<19 and 12<19. There is no"extra credit" for Friend B, even though B's answer was nearer to the target answer of 19. .

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 which can be equal to or less than the target number, the Bitcoin network will determine by a simple majority--51 percent --which miner to honour. Typically, it's the miner that has done the most work, i.e.

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

Now imagine 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. Rather, I am asking millions of would-be miners and I am thinking about a 64-digit hexadecimal number. Now you see that it's going to be quite difficult to guess the right answer.

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The number above has 64 digits. Easy enough to understand up to now. As you probably noticed, that number consists not only 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's unpack the term"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.