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Let's say you had one legit $20 and one really good photocopy of the same $20. If someone were to attempt to spend both the true bill and the fake one, someone who took the trouble of looking at both of those bills' consecutive numbers would see that they were exactly the same number, and consequently one of them needed to be fictitious.
That isn't a great analogy--we will 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 a matter of controversy, as some miners believe the block size ought to be increased to accommodate more data.
Note that I said that verifying 1 MB value of transactions makes a miner eligible to earn Bitcoin--not everyone who verifies transactions will receive paid out.
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 data 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 must be the first miner to reach the right answer to some numeric issue. This practice is also known as a proof of work.
The good news: No advanced math or computation is involved. You may have heard 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") which is less than or equivalent to the hash.
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The bad news: Because it is guesswork, you need a lot of computing power in order to get there first. To mine , you need to have a high"hash speed," that is quantified in terms click this link 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 site Cryptocompare provides a very 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--particularly Ethereum miners--buy 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 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 sheet of paper and seal it in an envelope. My friends don't need to guess the specific number, they just 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'm 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 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 happen frequently, but at 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 their website majority--51 percent --that miner to honour. Typically, it is the miner who blog has done the most work, i.e.
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The number above has 64 digits. Easy enough to understand so far. As you likely 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 us unpack the term"hexadecimal."
As you know, we use the"decimal" system, which means it's base 10. This in turn means that every digit has 10 possibilities, 0-9.