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Let's say you had one legit $20 and one really good photocopy of that same $20. If someone were to try to spend both the true bill and the fake one, someone that took the problem of looking at either of the bills' consecutive numbers would observe that they were exactly the exact same number, and consequently one of them needed to be false.
That 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 established by Satoshi Nakamoto, and is an issue of controversy, as some miners think the block size ought to be increased to accommodate more data.
Note that I said that verifying 1 MB worth of transactions makes a miner eligible to earn Bitcoin--not everyone who verifies transactions will get paid off.
1MB of transactions can theoretically be as small as 1 transaction (although this is not in any way common) or several thousand. It depends on how much information 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 must be the first miner to reach 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 might have heard that miners are solving difficult mathematical problems--that is 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") which is less than or equal to the 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," 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 just how much Bitcoin you could mine along with your mining rig's hash rate, 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 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, home-made mining machine. The cards are those rectangular blocks with whirring circles. Note the sandwich twist-ties holding the pictures cards anchor to the metal rod.
Case in point I tell three friends that I'm thinking of 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 need to guess the exact number, they simply must be the very first person to figure 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 21they lose 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 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 determine by a simple majority--51 percent --that miner to honour. Normally, it's the miner who has done the work, i.e.
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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 just of numbers, but also letters of the 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.