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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 fake one, someone who took the problem of looking at both of the bills' serial numbers would see that they were exactly the same number, and consequently one of them had to be false.
This isn't a perfect analogy--we will 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 can be a matter of controversy, as some miners think the block size should be increased to accommodate more data.
Note that I stated that verifying 1 MB value of transactions makes a miner eligible to earn Bitcoin--not everyone who verifies transactions will get paid off.
1MB of transactions can technically be little as 1 transaction (although this is not at all common) or a few thousand. It depends on how much information the transactions take up.
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 have to be the first miner to arrive at the right 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 may have heard that miners are solving challenging mathematical problems--that is not true at all. What they're 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 target 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," 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 how much Bitcoin you could mine with your mining rig's hash pace, the site Cryptocompare offers a helpful calculator.
Either 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 cheap method to cobble together mining operations. The photograph below this page 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 into the metal pole.
Case in point : 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 and seal it in an envelope. My friends don't have to guess the specific number, they just have to be the first person to figure any number that is less than or equal to the number I'm thinking of.
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Let us say I am thinking about the number 19. If Friend A guesses 21they lose because 21>19. If Friend B supposes 16 and Friend C guesses 12, then they've both theoretically arrived at viable answers, since 16<19 and 12<19. There is no"extra credit" for Friend B, even though B's answer was nearer to the target answer of 19. .
In Bitcoin terms, simultaneous answers happen frequently, but at 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 determine by a simple majority--51 percent --which miner to honour. Typically, 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"guess what number I'm thinking of" question, however I'm not asking just three friends, and I'm not thinking of a number between 1 and 100. Instead, I am 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 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 this alphabet. Why is that
In order to understand 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 every digit has 10 chances, 0-9.