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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 real bill and the fake one, someone who took the trouble of looking at both of the invoices' serial numbers would observe that they were the same number, and thus one of them had to be fictitious.

That isn't a perfect analogy--we'll explain in more detail below. .

Once a miner has verified 1 MB (megabyte) worth 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 believe the block size should be increased to accommodate more information.

Note that I stated that verifying 1 MB worth of transactions makes a miner qualified to earn Bitcoin--not everyone who verifies transactions will get paid off.

1MB of transactions can technically be little 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 effort, one is a matter of luck.

2) You have to be the first miner to reach the right answer to some numeric problem. This process is also known as a proof of work.

The fantastic news: No advanced math or computation is involved. You might have discovered 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 hash.

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The bad news: Since it is guesswork, you need a good deal of computing power in order to get there first. To mine , you need to find more get a high"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 can mine with your mining rig's hash pace, 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--especially Ethereum miners--purchase individual graphics cards (GPUs) as a low-cost way to cobble together mining operations.  The photograph below is a makeshift, high-tech mining machine.  The cards are such rectangular blocks with whirring circles.  Note the sandwich twist-ties holding the pictures cards into the metal pole.

Case in point : I tell three friends that I'm thinking of a number between 1 and 100, and 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's less than or equal to the number I'm thinking of.

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Let us say I am thinking about the number 19. If Friend A guesses 21, they lose because 21>19. If Friend B guesses 16 and Friend C supposes 12, then they've both technically came at viable Home Page answers, since 16<19 and 12<19. There's no"extra credit" for Friend B, even though B's answer was closer to the goal answer of 19. .

In Bitcoin conditions, simultaneous answers occur frequently, but in 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 percent --that miner to honour. Normally, it's the miner who has done the most work, i.e.

The losing block then becomes an"orphan block" .

Now imagine I present the"figure what number I am thinking of" question, however I am not asking just 3 friends, and I'm not thinking of a number between 1 and 100. Rather, I am asking millions of would-be miners and address 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 preceding has 64 digits. Easy enough to understand so far. As you likely 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 term"hexadecimal."

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