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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 attempt to spend both the real bill and the fake one, someone who took the problem of looking at both of those bills' consecutive numbers would see that they were exactly the same number, and consequently one of them had to be fictitious.

This isn't a great analogy--we will 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 should be increased to accommodate more data.

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 out.

1MB of transactions can theoretically be as little as 1 transaction (although 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 effort, one is a matter of luck.

2) You must be the first miner to arrive at the right answer to some numeric issue. This practice is also known as a proof of work.

The good news: No advanced math or computation is involved. You may have discovered 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 think of a 64-digit hexadecimal number (a"hash")  that 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 her comment is here in order to get there first. To mine , you need to have a high"hash speed," which is quantified in terms of megahashes per second (MH/s), gigahashes per second (GH/s), and terahashes why not try here per second (TH/s).

If you want to estimate how much Bitcoin you could mine with your mining rig's hash pace, the site Cryptocompare offers a very 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 low-cost method to cobble together mining operations.  The photo below is a makeshift, home-made mining machine.  The graphics cards are such rectangular cubes with whirring circles.  Note the sandwich twist-ties holding the graphics cards to the metal rod.

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 exact number, they just must be the 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'm thinking about the number 19. If Friend A guesses 21they lose because 21>19. If Friend B guesses 16 and Friend C guesses 12, then they've both theoretically arrived at viable 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 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 equivalent to or less than the target number, the Bitcoin network will wikipedia reference determine by a simple majority--51%--which miner to honour. Normally, it's the miner that has done the work, i.e.

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The losing block then becomes an"orphan block" .

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Now imagine that I pose the"guess what number I am thinking of" question, however I'm not asking just three friends, and I'm not thinking of a number between 1 and 100. Rather, I am asking millions of would-be miners and I'm 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 preceding has 64 digits. Easy enough to understand so far. As you probably noticed, that number consists not only of numbers, but also letters of this alphabet. Why is that

In order to understand what these letters are doing in the middle of numbers, let's unpack the term"hexadecimal."

As you know, we utilize the"decimal" system, which means it's base 10. This in turn means that each and every digit has 10 possibilities, 0-9.

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