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Let's say you had one legit $20 and one quite good photocopy of the 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 both of those bills' consecutive numbers would observe that they were exactly the same number, and consequently one of them had to be fictitious.

That isn't a perfect analogy--we'll 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 can be a matter of controversy, as some miners think the block size ought to be increased to accommodate more data.

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

1MB of transactions can technically be small as 1 transaction (though 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 fulfill two conditions. One is a matter of work, one is a matter of luck.

2) You have to be the first miner to reach the perfect answer to a numeric problem. This practice is also known as an evidence of work.

The good news: No advanced math or computation is involved. You might have heard that miners are solving difficult mathematical problems--that is not true at all. What they are 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 target 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 , you need to have a higher"hash rate," 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 just how much Bitcoin you could 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 way to cobble together mining operations.  The photo 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 rod.

Case in point : I tell three friends I'm thinking about a number between 1 and 100, and I try these out write that number on a piece of paper and seal it in an envelope. My friends don't need to guess the specific number, they simply must be the very first person to guess any number that is less than or equal to this number I am thinking of.

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Let's say I'm thinking about 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 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, pop over to these guys simultaneous answers occur frequently, but at 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%--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 I present the"figure what number I'm thinking of" question, but I'm not asking only 3 friends, and I'm not thinking of a number between 1 and 100. Instead, I am asking millions of would-be miners and I'm thinking about a 64-digit hexadecimal number. Now you see that it is going to be quite hard to guess the right answer.

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The number above has 64 digits. Easy enough to understand so far. As you probably noticed, that number consists not just of numbers, but also letters of this alphabet. Why is that

In order to understand these letters are doing in the center of numbers, let us 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.