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Let us say you had one legit $20 and one really 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 both of those bills' serial numbers would observe that they had been the exact same number, and consequently one of them had to be false.

That isn't a perfect analogy--we'll 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 set by Satoshi Nakamoto, and is a matter of controversy, as some miners think the block size ought to 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 out.

1MB of transactions can technically be little as 1 transaction (though this is not at all common) or a few thousand. It depends on how much information the transactions consume.

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 arrive at the perfect answer to some numeric issue. This practice is also known as a proof of work.

The good news: No advanced math or computation is involved. You may have discovered that miners are solving challenging mathematical problems--that's not true in any way. What they are 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's guesswork, you need a lot 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 just how much Bitcoin you can mine along with your mining rig's hash pace, the website 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 into the tens of thousands.  Some miners--especially Ethereum miners--purchase 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 cubes with whirring circles.  Note the sandwich twist-ties holding the pictures cards to the metal rod.

Case in point : I tell three friends that I'm thinking of a number between 1 and 100, and that I write that number on a sheet of paper and seal it in an envelope. My friends don't need to guess the exact number, they just must be the very first person to figure any number that is less than or equal to the number I am thinking of.

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Let us say I am thinking about the number 19. If Friend A guesses 21, they shed because 21>19. If Friend B supposes 16 and Friend C supposes 12, then Clicking Here they have both technically came at viable answers, since 16<19 and 12<19. There is no"extra credit" for Friend B, even though B's answer was closer to the target answer of 19. .

In Bitcoin terms, 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 equal to or less than the target number, the Bitcoin network will decide by a simple majority--51 percent --that miner to honour. Normally, it's the miner that has done the work, i.e.

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

Now imagine that I pose the"figure what number I am thinking of" question, but I'm not asking just 3 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 about a 64-digit hexadecimal number. Now you see that it is going to be extremely hard to guess the ideal answer.

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The number above has 64 digits. Easy enough to understand so far. As you likely 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 know, we utilize the"decimal" system, which means it's base 10. This in turn means that each and every digit has 10 chances, 0-9.