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Let us say you had one legit $20 and one quite good photocopy of that same $20. If someone were to try to spend both the true bill and the fake one, someone who took the trouble of looking at both of the invoices' consecutive numbers would see that they had been the exact same number, and consequently one of them had to be fictitious.
That isn't a great analogy--we'll 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 an issue 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 worth of transactions makes a miner eligible to earn Bitcoin--not everyone who supports transactions will receive paid out.
1MB of transactions can theoretically be as small as 1 transaction (although this is not at all common) or several thousand. It depends on how much data the transactions consume.
In order to earn Bitcoin, you need to meet two conditions. One is a matter of work, one is a matter of luck.
2) You have to be the first miner to arrive at the perfect answer to some numeric problem. This process 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 difficult 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") which is less than or equal to the hash.
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The bad news: Because 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 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 just how much Bitcoin you could mine along with your mining rig's hash rate, the site Cryptocompare offers a helpful calculator.
Either a GPU (graphics read this post here 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 low-cost method to cobble together mining operations. The photograph below is a makeshift, home-made mining machine. The cards are such rectangular blocks with whirring circles. Note the sandwich twist-ties holding the pictures cards into the metal pole.
Example: I tell three friends that I'm thinking about a number between 1 and 100, and that I write that number on a sheet of paper and seal hop over to here it in an envelope. My friends don't have to guess the specific number, they simply must be the first person to guess any number that is less than or equal to this number I'm thinking of.
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Let's say I am 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 is no"extra credit" for Friend B, even though B's answer was nearer to the goal answer of 19. .
In Bitcoin conditions, simultaneous answers happen 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 determine by a simple majority--51%--which miner to honour. Typically, it's the miner that has done the most 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 3 friends, and I'm not thinking of a number between 1 and 100. Rather, I am asking millions of prospective miners and I'm thinking of a 64-digit hexadecimal number. Now you see that it's going to be extremely hard to guess the right 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 only of numbers, but also letters of the 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 utilize the"decimal" system, which means it is base 10. This in turn means that each and every digit has 10 possibilities, 0-9.