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

This 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 eligible to win the 12.5 BTC. The 1 MB limit was established 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 said that verifying 1 MB value of transactions makes a miner eligible to earn Bitcoin--not everyone who supports transactions will receive paid off.

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

2) You have to be the first miner to reach the perfect answer to some 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're actually 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 is guesswork, you need a good deal of computing power in order to get there . To mine successfully, you need to have a high"hash speed," 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 how much Bitcoin you could mine with your mining rig's hash pace, the website Cryptocompare offers 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--purchase individual graphics cards (GPUs) as a cheap method to cobble together mining operations.  The photograph below is a makeshift, high-tech 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 that I'm thinking about a number between 1 and 100, and I write that number on a piece of paper and seal it in an envelope. My friends don't have to guess the exact number, they just have to be the first person to figure any number that's less than or equal to this number I'm thinking of.

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Let us say I'm thinking about the number 19. If Friend A guesses 21, they shed because 21>19. If Friend B guesses 16 and Friend C guesses 12, then they've both technically came at viable answers, because 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 terms, simultaneous answers occur frequently, but at the end of the day there can only be one winning answer. When multiple simultaneous answers are presented that are equal to or less than the target number, the Bitcoin network will decide by a simple majority--51%--that 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 I pose the"guess what number I am thinking of" question, but I am not asking just 3 friends, and I am not thinking of a number between 1 and 100. Rather, I am asking millions of would-be miners and I'm thinking about a 64-digit hexadecimal number. Now you see that it is going to be quite hard visit 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 what these letters are doing in the middle of numbers, let's unpack the term"hexadecimal."

As you know, we utilize the"decimal" system, which means it's base 10. This in turn means that every digit has 10 possibilities, 0-9.

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