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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 true bill and the fake one, someone that took the problem of looking at both of the invoices' serial numbers would observe that they were exactly the same number, and thus one of them had to be false.

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

Once a miner has verified 1 MB (megabyte) worth of Bitcoin transactions, they are entitled 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 believe the block size should 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 verifies transactions will get paid off.

1MB of transactions can theoretically be as small as 1 transaction (though this is not at all common) or a few thousand. It depends on how much data the transactions take up.

In order to earn Bitcoin, you need to meet 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 a proof of work.

The good news: No advanced math or computation is involved. You might have heard that miners are solving challenging mathematical problems--that's not true in any way. What they are actually 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 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," 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 with your mining rig's hash rate, 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 into the tens of thousands.  Some miners--especially 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 those rectangular cubes with whirring circles.  Note the sandwich twist-ties holding the pictures cards to the metal rod.

Case in point : I tell three friends that I'm thinking about 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 exact 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'm thinking about the number 19. If Friend A guesses 21they lose because 21>19. If Friend B guesses 16 and Friend additional hints C guesses 12, then they have both technically came at viable answers, since 16<19 and 12<19. There's no"extra credit" for Friend B, even though B's answer was nearer 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 that are equivalent to or less than the target number, the Bitcoin network will decide by a simple majority--51 percent --which miner to honour. Normally, it is the miner who has done the most work, i.e.

The losing block then becomes an"orphan block" .

Now imagine that I present the"figure what number I am thinking of" question, however I'm not click reference asking just three friends, and I am not thinking of a number between 1 and 100. Rather, I am 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 ideal answer.

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The number above has 64 digits. Easy enough to understand up to now. 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's unpack the word"hexadecimal."

As you knowwe use the"decimal" system, which means it's base 10. This in turn means that click reference each and every digit has 10 chances, 0-9.