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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 try to spend both the real bill and the imitation one, someone who took the problem of looking at either of those invoices' consecutive numbers would see that they had been the same number, and consequently one of them had to be false.

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

Once a miner has confirmed 1 MB (megabyte) worthiness of Bitcoin transactions, they are eligible to win the 12.5 BTC. The 1 MB limit was established by Satoshi Nakamoto, and can be a matter of controversy, as some miners believe the block size should be increased to accommodate more information.

Note that I stated that verifying 1 MB worth of transactions makes a miner eligible to earn Bitcoin--not everyone who supports transactions will get paid out.

1MB of transactions can technically be little as 1 transaction (although this is not in any way common) or a few 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 arrive at 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 difficult mathematical problems--that's 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: Since it is guesswork, you need a good deal of computing power in order to get there . To mine successfully, you need to have a higher"hash speed," which 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 how much Bitcoin you could mine along with your mining rig's hash pace, 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 into the tens of thousands.  Some miners--particularly 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 graphics cards are those rectangular cubes with whirring circles.  Note the sandwich twist-ties holding the pictures cards into the metal rod.

Example: I tell three friends that 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, they simply must be the first person to guess any number that's less than or equal to this number I'm thinking of.

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Let us say I am thinking of the number 19. If Friend A guesses 21, they lose because 21>19. If Friend B guesses 16 and Friend C guesses 12, then they have both technically came at viable answers, because 16<19 and 12<19. There's no"extra credit" for Friend B, even though B's answer was nearer published here to the target 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 determine by a simple majority--51%--that miner to honour. Normally, it's the miner that has done the work, i.e.

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The losing block then becomes an"orphan block." .

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Now imagine that 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 would-be miners and I am 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 preceding 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 center of numbers, let us unpack the word"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.

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