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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 true bill and the imitation one, someone that took the trouble of looking at either of the invoices' consecutive numbers would see that they had been the exact same number, and thus one of them needed to be false.
This isn't a perfect 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 set 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 stated that verifying 1 MB value of transactions makes a miner qualified to earn Bitcoin--not everyone who supports transactions will get paid out.
1MB of transactions can theoretically be as little as 1 transaction (though this is not in any way common) or several thousand. It depends on how much information 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 perfect answer to a numeric problem. This practice is also known as an evidence of work.
The good news: No advanced math or computation is involved. You may have heard that miners are solving difficult mathematical problems--that is not true at all. What they're doing is trying to be the first miner to think of a 64-digit hexadecimal number (a"hash") that is less than or equal 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 . To mine , you need to have a higher"hash rate," 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 how much Bitcoin you can mine with your mining rig's hash pace, the site Cryptocompare provides a very 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--buy individual graphics cards (GPUs) as a cheap method to cobble together mining operations. The photo below is a makeshift, home-made mining machine. The cards are those rectangular cubes with whirring circles. Note the next sandwich twist-ties holding the graphics cards to the metal pole.
Case in point : I tell three friends I'm thinking of a number between 1 and 100, and that I write that number on a sheet of paper and seal it in an envelope. My friends don't have to guess the exact number, they simply have to be the very first person to figure any number that's less than or equal to the 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 lose because 21>19. If Friend B supposes 16 and Friend C guesses 12, then they've both theoretically arrived at workable 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 happen 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 decide by a simple majority--51%--which miner to honour. Normally, it's the miner that has done the work, i.e.
The losing block then becomes an"orphan block" .
Now imagine I pose the"figure what number I'm thinking of" question, however I am not asking just three friends, and I'm not thinking of a number between 1 and 100. Instead, I am asking millions of would-be 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 ideal answer.
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The number preceding has 64 digits. Easy enough to understand so far. As you likely 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 middle of numbers, let us unpack the term"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.