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Let us say you had one legit $20 and one quite good photocopy of that same $20. If someone were to try to spend both the real bill and the imitation one, someone who took the trouble of looking at either of the bills' serial numbers would observe that they had been the exact same number, and consequently one of them had to be fictitious.

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

Once a miner has confirmed 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 an issue of controversy, as some miners believe the block size ought to be increased to accommodate more data.

Note that I said that verifying 1 MB value of transactions makes a miner eligible to earn Bitcoin--not everyone who verifies transactions will receive paid off.

1MB of transactions can technically be little as 1 transaction (though this is not at all common) or several thousand. It depends on how much information the transactions consume.

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 have to be the first miner to arrive at the right answer to a numeric issue. This process 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 challenging mathematical problems--that is not true in any way. What they are 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 target hash.

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The bad news: Since it's guesswork, you need a lot of computing power in order to get there first. To mine , you need to get a higher"hash speed," which 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 with your mining rig's hash rate, the website Cryptocompare offers a very helpful calculator.

Either a GPU (graphics processing helpful hints unit) miner or an application-specific integrated circuit (ASIC) miner. These can run from $500 into 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 see this website 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 pole.

Case in point I tell three friends I'm thinking about a number between 1 and 100, and I write that number on a piece of paper and seal it in an envelope. My friends don't have to guess the specific number, they simply have to be the very first person to figure any number that is 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's no"extra credit" for Friend B, even though B's answer was nearer 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 that are equivalent to or less than the target number, the Bitcoin network will decide by a simple majority--51%--that miner to honour. Typically, it is the miner that has done the work, i.e.

The losing block then becomes an"orphan block" .

Now imagine that I pose the"guess what visit this page number I am 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'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 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 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's unpack the word"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.