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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 try to spend both the true bill and the fake one, someone that took the problem of looking at both of those invoices' serial numbers would observe that they had been the same number, and thus one of them needed to be fictitious.

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

Once a miner has verified 1 MB (megabyte) worthiness of Bitcoin transactions, they are entitled to win the 12.5 BTC. The 1 MB limit was set by Satoshi Nakamoto, and is a matter 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 eligible to earn Bitcoin--not everyone who verifies transactions will receive paid out.

1MB of transactions can technically be little as 1 transaction (though this is not in any way common) or several thousand. It depends on how much data the transactions consume.

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 must be the first miner to arrive at the right answer to a 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 discovered that miners are solving difficult mathematical problems--that's not true at all. What they're doing is trying to be the first miner to think of a 64-digit hexadecimal number (a"hash")  which is less than or equivalent to the hash.

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The bad news: Since it's guesswork, you need a good deal of computing power in order to get there first. To mine successfully, you need to get a high"hash rate," which is quantified in terms of megahashes per second (MH/s), gigahashes per second (GH/s), Find Out More and terahashes per second (TH/s).

If you want to estimate how much Bitcoin you could mine with your mining rig's hash rate, the site Cryptocompare provides 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--particularly Ethereum miners--purchase individual graphics cards (GPUs) as a cheap way to cobble together mining operations.  The photograph below is a makeshift, high-tech mining machine.  The graphics cards are those rectangular cubes with whirring circles.  Note the sandwich twist-ties holding the graphics cards to the metal rod.

Case in point : I tell three friends I'm thinking of 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 have my latest blog post to guess the exact number, they simply have to be the 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'm thinking of 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 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 closer to the goal 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 that are equivalent to or less than the target about his number, the Bitcoin network will determine by a simple majority--51 percent --which miner to honour. Typically, it's 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 I present the"figure what number I'm thinking of" question, however I'm not asking only three friends, and I am not thinking of a number between 1 and 100. Rather, I'm asking millions of would-be miners and I am thinking of a 64-digit hexadecimal number. Now you see that it is going to be extremely difficult to guess the ideal answer.

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The number preceding has 64 digits. Easy enough to understand up to now. As you likely noticed, that number consists not only of numbers, but also letters of the alphabet. Why is that

In order to understand what these letters are doing in the middle of numbers, let us unpack the word"hexadecimal."

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

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