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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 real bill and the fake one, someone that took the problem of looking at either of the invoices' consecutive numbers would see that they had been the same number, and thus one of them had to be false.

This isn't a perfect 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 stated that verifying 1 MB worth of transactions makes a miner eligible to earn Bitcoin--not everyone who supports transactions will receive paid out.

1MB of transactions can theoretically be as little as 1 transaction (though this is not at all 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 work, one is a matter of luck.

2) You must be the first miner to reach the perfect answer to some numeric issue. This process is also known as an evidence of work.

The good news: No advanced math or computation is involved. You may have discovered that miners are solving challenging mathematical problems--that's not true at all. What they're actually 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: Because it's guesswork, you need a lot of computing power in order to get there first. To mine successfully, you need to have a high"hash speed," which is quantified this 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 can mine along with your mining rig's hash rate, the website Cryptocompare offers a very helpful calculator.

Either 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 low-cost method to cobble together mining operations.  The photograph below is a makeshift, home-made mining machine.  The graphics cards are such rectangular blocks with whirring circles.  Note the sandwich twist-ties holding the pictures cards to the metal rod.

Example: I tell three friends that 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 have to guess the exact number, they simply must 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 lose because 21>19. If Friend B supposes 16 and Friend C guesses 12, then they've 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 closer to the goal answer of 19. .

In Bitcoin terms, 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 decide by a simple majority--51 percent --that miner to honour. Normally, it is the miner that has done the work, i.e.

The losing block then becomes an"orphan block" .

Now imagine I pose the"figure what number I am thinking of" question, but I'm not asking only 3 friends, and I'm not thinking of a number between 1 and 100. Rather, I'm asking millions of would-be miners and I am thinking about a 64-digit hexadecimal number. Now you see that it is going to be extremely hard to guess the right answer.

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The number preceding has 64 digits. Easy enough to understand up to now. As you likely 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 term"hexadecimal."

As you knowwe utilize the"decimal" system, which means it's base 10. This in turn means that every recommended you read digit has 10 chances, 0-9.