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Let us 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 imitation one, someone who took the trouble of looking at either of those invoices' consecutive numbers would see that they had been exactly the same number, and consequently one of them needed to be false.

That isn't a perfect 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 set 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 stated that verifying 1 MB worth of transactions makes a miner eligible to earn Bitcoin--not everyone who verifies transactions will get paid off.

1MB of transactions can technically be small as 1 transaction (although this is not in any way common) or several 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 work, one is a matter of luck.

2) You have to be the first miner to reach the right answer to some numeric problem. This practice is also known as a proof 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 are doing is trying to be the first miner to come up with a 64-digit hexadecimal number (a"hash")  which is less than or equivalent to the 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 successfully, you need to get 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 could mine with your mining rig's hash pace, the website Cryptocompare offers a helpful calculator.

Either way a GPU Look At This (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--buy individual graphics cards (GPUs) as a low-cost method to cobble together mining operations.  The photo below is a makeshift, home-made mining machine.  The cards are such rectangular blocks with whirring circles.  Note the sandwich twist-ties holding the pictures cards to the metal rod.

Example: 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 specific number, they simply have to be the very first person to guess any number that is less than or equal to this number I am thinking of.

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Let's say I'm 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 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 click this link 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 decide by a simple majority--51%--which miner to honour. Typically, it's the miner that has done the most work, i.e.

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The losing block then becomes an"orphan block" .

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Now imagine that I pose the"guess what number I'm thinking of" question, however I am not asking only three friends, and I am not thinking of a number between 1 and 100. Rather, I'm next page asking millions of would-be miners and I'm thinking of a 64-digit hexadecimal number. Now you see that it's going to be quite hard to guess the ideal answer.

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The number preceding has 64 digits. Easy enough to understand up to now. As you probably 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'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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