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Let us say you had one legit $20 and one quite good photocopy of that same $20. If someone were to try to spend both the true bill and the fake one, someone who took the trouble of looking at either of those bills' serial numbers would see that they were the exact 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 verified 1 MB (megabyte) worth 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 believe the block size should be increased to accommodate more information.

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 several thousand. It depends on how much information 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 a numeric issue. This process is also known as an evidence of work.

The fantastic 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")  which is less than or equal to the target hash.

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The bad news: Because 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 higher"hash rate," that 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 rate, the site Cryptocompare provides a 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--particularly Ethereum miners--buy individual graphics cards (GPUs) as a low-cost method to cobble together mining operations.  The photograph below is a makeshift, home-made mining machine.  The graphics cards are such rectangular cubes with whirring circles.  Note the sandwich twist-ties holding the graphics cards into 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 have to guess the exact Learn More number, they just must be the 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 am thinking of the number 19. If Friend A guesses 21, they lose because 21>19. If Friend B guesses 16 and Friend C guesses 12, then they've both theoretically arrived at viable answers, since 16<19 and 12<19. There's 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 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 is the miner that has done the most work, i.e.

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

Now imagine that I present the"figure what number I am thinking of" question, however I am not asking just 3 friends, and I'm not thinking of a number between 1 and 100. Instead, I am asking millions of prospective miners and I'm thinking of a 64-digit hexadecimal number. Now you see that it's going to be extremely difficult to guess the right 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 just of numbers, but also letters of this alphabet. Why is that

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

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