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Let us say you had one legit $20 and one really good photocopy of the same $20. If someone were to attempt to spend both the real bill and the imitation one, someone that took the problem of looking at both of the invoices' consecutive numbers would observe that they had been exactly the same number, and thus one of them had to be false.

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

Once a miner has confirmed 1 MB (megabyte) worthiness of Bitcoin transactions, they are entitled to win the 12.5 BTC. The 1 MB limit was established by Satoshi Nakamoto, and is an issue of controversy, as some miners think the block size ought to be increased to accommodate more information.

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

1MB of transactions can theoretically be as small as 1 transaction (though this is not in any way common) or several 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 some numeric issue. This process is also known as a proof of work.

The fantastic news: No advanced math or computation is involved. You may have discovered that miners are solving difficult mathematical problems--that is not true in any way. What they're 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 equivalent to the target hash.

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The bad news: Because it is guesswork, you need a good deal of computing power in order to get there . To mine successfully, you need to have a high"hash rate," which 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 how much Bitcoin you can mine along with your mining rig's hash rate, the site Cryptocompare offers 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--particularly Ethereum miners--purchase individual graphics cards (GPUs) as a cheap method to cobble together mining operations.  The photograph below is a makeshift, high-tech mining machine.  The cards are such rectangular cubes with whirring circles.  Note the sandwich twist-ties holding the pictures cards into the metal rod.

Example: I tell three friends that I'm thinking about a number between 1 and 100, and that I 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 the number I'm thinking of.

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Let's say I am thinking about the number 19. If Friend A guesses 21they lose because 21>19. If Friend B supposes 16 and Friend C guesses 12, then they've both theoretically arrived at workable 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 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 decide by a simple majority--51%--which miner to honour. Typically, it is 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 present the"figure what number I am thinking of" question, however I'm not asking only 3 friends, and I am not thinking of a number between 1 and 100. Instead, I'm asking millions of would-be miners and I am thinking of a 64-digit hexadecimal number. Now you see that it's going to be extremely difficult to guess the ideal answer.

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The number above has 64 digits. Easy enough to understand up to now. As you likely noticed, that number consists not just of numbers, but article source also letters of the 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 is base 10. This in turn means that each and every digit has 10 chances, 0-9.

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