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Let us say you had one legit $20 and one really good photocopy of the same $20. If someone were to try to spend both the true bill and the fake one, someone that took the trouble of looking at either of the invoices' consecutive numbers would see that they were exactly the same number, and thus 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) worthiness of Bitcoin transactions, they are entitled 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 should be increased to accommodate more information.
Note that I said that verifying 1 MB value of transactions makes a miner eligible to earn Bitcoin--not everyone who supports transactions will receive paid out.
1MB of transactions can theoretically be as little as 1 transaction (although this is not in any way common) or a few thousand. It depends on how much data the transactions consume.
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 right answer to a 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 heard that miners are solving difficult mathematical problems--that is not true at all. What they are actually 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 target 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 first. To mine , you need to have a higher"hash rate," 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 just how much Bitcoin you can mine along with your mining rig's hash pace, 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 into the tens of thousands. Some miners--especially Ethereum miners--buy individual graphics cards (GPUs) as a cheap 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 graphics cards to the metal pole.
ExampleI tell three friends I'm thinking about 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 exact number, they simply have to be the first person to figure any number that is less than or equal to this number I am thinking of.
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Let us say I'm thinking of the number 19. If Friend A guesses 21they lose because 21>19. If Friend B supposes 16 and Friend C supposes 12, then they have both theoretically arrived at viable answers, because 16<19 and 12<19. There's no"extra credit" for Friend B, even though B's answer was nearer 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 equal to or less than the target number, the Bitcoin network will determine by a simple majority--51 percent --that miner to honour. Typically, it is the miner who has done the work, i.e.
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The number above has 64 digits. Easy enough more 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 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 is base 10. This in turn means that every digit has 10 chances, 0-9.