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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 real bill and the fake one, someone that took the problem of looking at both of the invoices' consecutive numbers would observe that they were the exact same number, and consequently one of them had to be false.
This isn't a perfect 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 set 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 value of transactions makes a miner qualified to earn Bitcoin--not everyone who verifies transactions will get paid off.
1MB of transactions can theoretically be as small as 1 transaction (though 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 meet two conditions. One is a matter of effort, one is a matter of luck.
2) You have to be the first miner to arrive at the perfect answer to some numeric issue. This process is also known as a proof of work.
The good news: No advanced math or computation is involved. You might have heard that miners are solving difficult mathematical problems--that's not true at all. 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 equivalent to the target 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 first. To mine successfully, you need to have 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 how much Bitcoin you can mine with your mining rig's hash pace, the site Cryptocompare provides a 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--especially Ethereum miners--buy individual graphics cards (GPUs) as a low-cost way to cobble together mining operations. The photo below is a makeshift, high-tech mining machine. The graphics cards are those rectangular blocks with whirring circles. Note the sandwich twist-ties holding the pictures 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 specific number, they just have to be the first person to guess any number that's less than or equal to the number I am thinking of.
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Let us say I'm thinking of 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 have both theoretically arrived at viable answers, because 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 conditions, simultaneous answers occur 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 determine by a simple majority--51%--which miner to honour. Typically, it is the miner that has done the most work, i.e.
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The number above has 64 digits. Easy enough to understand up to now. 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 word"hexadecimal."
As you know, we utilize the"decimal" system, which means it's base 10. This in turn means that every digit has 10 possibilities, 0-9.