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Let us say you had one legit $20 and one quite good photocopy of the same $20. If someone were to try to spend both the real bill and the fake one, someone who took the trouble of looking at either of the invoices' serial numbers would observe that they had been the exact same number, and thus one of them had to be fictitious.

That isn't a great analogy--we will explain in more detail below. .

Once a miner has verified 1 MB (megabyte) worthiness of Bitcoin transactions, they are eligible 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 ought to be increased to accommodate more information.

Note that I said that verifying 1 MB value of transactions makes a miner qualified to earn Bitcoin--not everyone who verifies transactions will receive paid off.

1MB of transactions can technically be 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 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 right answer to some numeric problem. This process is also known as an evidence of work.

The good 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")  that is less than or equal to the target hash.

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The bad news: Because it is guesswork, you need a lot of computing power in order to get there . To mine , you need to get a higher"hash speed," that 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 just how much Bitcoin you can mine along with your mining rig's hash rate, 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 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.

Example: I tell three friends I'm thinking about a number between 1 and 100, and that 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, read they simply must 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'm thinking of the number 19. If Friend A guesses 21they shed because 21>19. If Friend B guesses 16 and Friend C guesses 12, then they have both theoretically arrived at workable answers, since 16<19 and 12<19. There is 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 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 percent --that miner to honour. Normally, it's the miner who 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 present the"guess what number I am thinking of" question, but I am not asking just 3 friends, and I'm not thinking of a number between 1 and 100. Instead, I'm asking millions of prospective miners and I'm thinking about a 64-digit hexadecimal number. Now you see that it is going to be quite hard to guess the ideal answer.

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The number above 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 center of numbers, let's unpack the word"hexadecimal."

As you knowwe use 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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