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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 attempt to spend both the true bill and the imitation one, someone who took the trouble of looking at either of those invoices' serial numbers would see that they were exactly the exact same number, and thus one of them needed to be fictitious.

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 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 supports transactions will get paid out.

1MB of transactions can theoretically be as small as 1 transaction (though this is not at all common) or several thousand. It depends on how much data the transactions take up.

In order to earn Bitcoin, you need to fulfill two conditions. One is a matter of work, one is a matter of luck.

2) You must be the first miner to reach the perfect answer to some numeric issue. This process is also known as a proof of work.

The good news: No advanced math or computation is involved. You might have heard that miners are solving challenging 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 equal to the 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 , you need to have a higher"hash speed," 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 how much Bitcoin you could mine along with your mining rig's hash pace, the website 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 to the tens of thousands.  Some miners--particularly Ethereum miners--purchase individual graphics cards (GPUs) as a low-cost way to cobble together mining operations.  The photograph below is a makeshift, home-made mining machine.  The cards are such rectangular cubes with whirring circles.  Note the sandwich twist-ties holding the pictures cards to the metal rod.

Example: I tell three friends I'm thinking about a number between 1 and 100, and that I write that number on a sheet of paper go to this website 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's less than or equal to the number I am thinking of. like it

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Let's say I'm thinking of the number 19. If Friend A guesses 21they shed because 21>19. If Friend B supposes 16 and Friend C guesses 12, then they have both theoretically arrived at workable answers, because 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 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 equivalent 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 who has done the work, i.e.

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

Now imagine that I pose the"guess what number I am thinking of" question, but I'm not asking just three friends, and additional info I am not thinking of a number between 1 and 100. Instead, I am asking millions of prospective miners and I am 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 likely noticed, that number consists not only of numbers, but also letters of this alphabet. Why is that

In order to understand these letters are doing in the center of numbers, let's unpack the term"hexadecimal."

As you know, we use the"decimal" system, which means it is base 10. This in turn means that each and every digit has 10 chances, 0-9.