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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 real bill and the fake one, someone who took the trouble of looking at either of those invoices' consecutive numbers would observe that they had been exactly the exact same number, and thus one of them needed to be fictitious.
This isn't a great analogy--we'll explain in more detail below. .
Once a miner has verified 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 is an issue of controversy, as some miners think the block size should 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 receive paid off.
1MB of transactions can technically be small as 1 transaction (though this is not in any way common) or several 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 work, one is a matter of luck.
2) You have to be the first miner to arrive at the perfect answer to some 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 challenging mathematical problems--that's not true at all. What they're actually doing is trying to be the first miner to come up with a 64-digit hexadecimal number (a"hash") that is less than or equal to the target hash.
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The bad news: Because it is guesswork, you need a lot of computing power in order to get there . To mine successfully, you need to get a higher"hash rate," that 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 just how much Bitcoin you can mine along with your mining rig's hash pace, the website 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 to the tens of thousands. Some miners--particularly 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 cards are those rectangular blocks with whirring circles. Note the sandwich twist-ties holding the pictures cards to the metal rod.
ExampleI tell three friends I'm thinking about a number between 1 and 100, and I write that number on a piece of paper and seal it in an envelope. My friends don't need to guess the specific number, they simply must be the first person to guess any number that is less than or equal to this number I am thinking of.
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Let's say I'm thinking about the number 19. If Friend A guesses 21they lose because 21>19. If Friend B supposes 16 and Friend C guesses 12, then they have both theoretically arrived at workable answers, since 16<19 and 12<19. There's 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 in the end of the day there can only be one winning answer. When multiple simultaneous answers are presented that are equivalent to or less than the target number, the Bitcoin network will determine by a simple majority--51%--which miner to honour. news Typically, it's the miner that has done the most work, i.e.
The losing block then becomes an"orphan block" .
Now imagine I present the"guess what number I'm thinking of" question, but I'm not asking only three friends, and I am not thinking of a number between 1 and 100. Instead, I am asking millions of prospective miners and I'm thinking about a 64-digit hexadecimal number. Now you see that it's going to be extremely difficult to guess the right answer.
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The number preceding has 64 digits. Easy enough to understand so far. As you probably noticed, that number consists not just of numbers, but also letters of the alphabet. Why is that
In order to understand what these letters are doing in the center of numbers, let's unpack the term"hexadecimal."
As you know, we use the"decimal" system, which means it's base 10. This in turn means that each and every digit has 10 possibilities, 0-9.