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Let's say you had one legit $20 and one really good photocopy of that same $20. If someone were to try to spend both the true bill and the imitation one, someone that took the problem of looking at both of the bills' serial numbers would observe that they had been exactly the exact same number, and thus one of them had to be false.
That isn't a perfect analogy--we'll 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 established by Satoshi Nakamoto, and can be a matter of controversy, as some miners believe the block size ought to be increased to accommodate more information.
Note that I said that verifying 1 MB worth of transactions makes a miner qualified to earn Bitcoin--not everyone who supports transactions will receive paid out.
1MB of transactions can theoretically be as small as 1 transaction (although 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 effort, one is a matter of luck.
2) You have to be the first miner to reach the right answer to a numeric issue. This process is also known as a proof of work.
The fantastic news: No advanced math or computation is involved. You might have heard 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 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 , you need to have a high"hash rate," 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 along with your mining rig's hash pace, the website 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--especially 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 cards are such 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 of a number between 1 and 100, and that I write that number on this content a piece of paper and seal it in an envelope. My friends don't have to guess the specific number, they simply 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's say I'm thinking about the number 19. If Friend A guesses 21they shed because 21>19. If Friend B guesses 16 and Friend C guesses 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 happen 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 decide by a simple majority--51%--that miner to honour. Typically, it is the miner that has done the 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 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 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.