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Let's say you had one legit $20 and one really 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 those bills' serial numbers would see that they had been exactly the exact same number, and thus one of them had to be false.

That isn't a great analogy--we will 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 believe 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 qualified to earn Bitcoin--not everyone who supports transactions will receive paid out.

1MB of transactions can theoretically be as 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 arrive at the perfect answer to some numeric problem. This practice is also known as an evidence of work.

The good news: No advanced math or computation is involved. You may have heard 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 think of 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's guesswork, you need a lot of computing power in order to get there . To mine , you need to get a high"hash rate," 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 how much Bitcoin you could mine along with your mining rig's hash pace, the site Cryptocompare offers a very helpful calculator.

Either way a GPU (graphics processing check it out unit) miner or an application-specific integrated circuit (ASIC) miner. These can run from $500 into the tens of thousands.  Some miners--particularly Ethereum miners--buy individual graphics cards (GPUs) as a cheap method to cobble together mining operations.  The photograph below is a makeshift, home-made mining machine.  The cards are such rectangular blocks with whirring circles.  Note the sandwich twist-ties holding the graphics cards into the metal rod.

Case in point : I tell three friends I'm thinking about a number between 1 and 100, and More about the author 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, basics they just have to be the very first person to guess any number that is less than or equal to this number I'm thinking of.

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Let us say I'm thinking about the number 19. If Friend A guesses 21, they shed because 21>19. If Friend B guesses 16 and Friend C supposes 12, then they've both technically came at workable answers, because 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 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 equal to or less than the target number, the Bitcoin network will determine by a simple majority--51%--that miner to honour. Typically, it's the miner who 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"guess what number I am thinking of" question, however I am not asking only 3 friends, and I'm 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'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 so far. As you probably noticed, that number consists not only of numbers, but also letters of this alphabet. Why is that

In order to understand what these letters are doing in the middle 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 possibilities, 0-9.

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