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Let us 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 trouble of looking at either of the invoices' serial numbers would observe that they had been the exact same number, and thus one of them had to be fictitious.

This isn't a perfect 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 can be an issue of controversy, as some miners think 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 theoretically be as little as 1 transaction (although this is not in any way common) or a few thousand. It depends on how much information 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 must be the first miner to arrive at the right answer to a numeric problem. This process is also known as a proof of work.

The good 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're 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: Because it is guesswork, you need a lot of computing power in order to get there . To mine , you need to get a higher"hash speed," 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 can mine along 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--especially Ethereum miners--buy individual graphics cards (GPUs) as a cheap way to cobble together mining operations.  The photograph below is a makeshift, home-made mining machine.  The graphics cards are those rectangular cubes with whirring click here to read circles.  Note the sandwich twist-ties holding the pictures cards to the metal pole.

Case in point : 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 envelope. My friends don't need to guess the specific number, they just have to be the very 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 21they shed because 21>19. If Friend B supposes 16 and Friend C guesses 12, then they have both technically see page came 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 target answer of 19. .

In Bitcoin terms, simultaneous answers happen 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, click 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"guess what number I'm thinking of" question, but I'm not asking just three 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 extremely difficult 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 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 know, we use the"decimal" system, which means it is base 10. This in turn means that each and every digit has 10 chances, 0-9.