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Let's say you had one legit $20 and one quite 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 the bills' consecutive numbers would observe that they were exactly the same number, and thus one of them had 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 entitled 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 think the block size ought to be increased to accommodate more data.
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 off.
1MB of transactions can theoretically be as little as 1 transaction (although this is not at all common) or a few thousand. It depends on how much data 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 must be the first miner to reach the right answer to some numeric issue. This process is also known as an evidence of work.
The fantastic news: No advanced math or computation is involved. You may have discovered that miners are solving challenging mathematical problems--that's not true in any way. What they're actually doing is trying to be the first miner to think of a 64-digit hexadecimal number (a"hash") which is less than or equal to the 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 , you need to have a high"hash rate," that 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 with your mining rig's hash pace, the website Cryptocompare offers a helpful calculator.
Either 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--purchase individual graphics cards (GPUs) as a cheap 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 graphics 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 specific number, they just 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 am thinking of the number 19. If Friend A guesses 21, they lose because 21>19. If Friend B supposes 16 and Friend C supposes 12, then they have both technically came 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 in 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 determine by a simple majority--51 percent --that miner to honour. Normally, it is the miner that has done the most work, i.e.
The losing block then becomes an"orphan block" .
Now imagine that I pose the"guess what number I'm thinking of" question, however I am not asking just 3 friends, and I'm not thinking of a number between 1 and 100. Instead, visit this website I'm asking millions of prospective miners and I am thinking of a 64-digit hexadecimal number. Now you see that it is going to be quite hard to guess the ideal read this answer.
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The number preceding has 64 digits. Easy enough to understand up to now. As you probably 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 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.