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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 either of those invoices' consecutive numbers would see that they were exactly the exact same number, and thus one of them had to be fictitious.

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

Once a miner has confirmed 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 data.

Note that I said 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 (although this is not in any way common) or a few thousand. It depends on how much data the transactions take up.

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 have to be the first miner to reach the perfect answer to some numeric issue. This process is also known as an evidence of work.

The good news: No advanced math or computation is involved. You may have discovered that miners are solving difficult mathematical problems--that is not true at all. 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 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 first. To mine , you need to have a higher"hash rate," which 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 with your mining rig's hash pace, the website 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 to the tens of thousands.  Some miners--especially Ethereum miners--buy individual graphics cards (GPUs) as a low-cost way to cobble together mining operations.  The photo below is a makeshift, home-made mining machine.  The graphics cards are those rectangular blocks with whirring circles.  Note the sandwich twist-ties holding the pictures cards blog to the metal rod.

Case in point : I tell three friends I'm thinking of 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 specific number, they just must be the first person to figure any number that is less than or equal to this number I'm 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 guesses 16 and Friend C supposes 12, then they've both theoretically arrived at workable answers, because 16<19 and 12<19. There is no"extra credit" for Friend B, even though B's answer was nearer to the goal answer of 19. .

In Bitcoin conditions, simultaneous answers occur frequently, but at the end of the day there can only be one winning answer. When multiple simultaneous answers are presented that are equal 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 work, i.e.

The losing block then becomes an"orphan block." .

Now imagine I present the"figure what number I'm thinking of" question, but I'm not asking only three friends, and I'm not thinking of a number between 1 and 100. Instead, I am asking millions of prospective miners and I am thinking of a 64-digit hexadecimal number. Now you see that it's 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 only of numbers, but also letters of the alphabet. Why is that

In order to understand these letters are doing in the center of numbers, let us unpack the term"hexadecimal."

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