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Let us say you had one legit $20 and one really good photocopy of the 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 either of those invoices' serial numbers would see that they had been the same number, and thus one of them had to be fictitious.
That isn't a great analogy--we'll explain in more detail below. .
Once a miner has confirmed 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 can be a matter of controversy, as some miners believe the block size should 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 theoretically be as small as 1 transaction (though this is not in any way common) or a few 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 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 practice is also known as a proof of work.
The fantastic news: No advanced math or computation is involved. You may have discovered that miners are solving challenging mathematical problems--that is not true at all. What they are doing is trying to be the first miner to think of a 64-digit hexadecimal number (a"hash") that is less than or equivalent to the hash.
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The bad news: Since it's guesswork, you need a lot of computing power in order to get there first. To mine successfully, you need to have 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 can mine along with your mining rig's hash rate, 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--especially Ethereum miners--buy individual graphics cards (GPUs) as a low-cost way to cobble together mining operations. The photograph below is a makeshift, high-tech mining machine. The graphics cards are such rectangular blocks with whirring circles. Note the sandwich twist-ties holding the graphics cards into the metal pole.
Example: I tell three friends that I'm thinking about a number between 1 and 100, and I write that web number on a piece 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 guess any number that's 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 21, they lose because 21>19. If Friend B guesses 16 and Friend C supposes 12, then 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 occur check my source 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 who has done the work, i.e.
The losing block then becomes an"orphan block." .
Now imagine I pose the"guess what number I am thinking of" question, however I'm not asking only three friends, and I am not thinking of a number between 1 and 100. Rather, I'm asking millions of prospective miners and I am thinking of a 64-digit hexadecimal number. Now you see that it is going to be quite difficult to guess the ideal answer.
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The number above has 64 digits. Easy enough to understand up to now. As you likely noticed, that number consists not just of numbers, but also letters of this alphabet. Why is that
In order to understand what these letters are doing in the center of numbers, let us unpack the term"hexadecimal."
As you knowwe use the"decimal" system, which means it's base 10. This in turn means that each and every digit has 10 possibilities, 0-9.