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Let us say you had one legit $20 and one quite good photocopy of that same $20. If someone were to try to spend both the real bill and the imitation one, someone that took the problem of looking at either of those invoices' consecutive numbers would observe that they had been the same number, and consequently one of them had to be false.
That isn't a great analogy--we will explain in more detail below. .
Once a miner has confirmed 1 MB (megabyte) worth of Bitcoin transactions, they are eligible 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 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 supports transactions will get paid out.
1MB of transactions can theoretically be as little as 1 transaction (although this is not at all common) or several 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 must be the first miner to arrive at the perfect answer to some numeric issue. 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 in any way. What they are actually doing is trying to be the first miner to think of a 64-digit hexadecimal number (a"hash") which is less than or equivalent to the hash.
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The bad news: Because it's guesswork, you need a lot of computing power in order to get there first. To mine successfully, 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 just how much Bitcoin you could mine with your mining rig's hash rate, the site 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--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 graphics cards are those rectangular blocks with whirring circles. Note the sandwich twist-ties holding the pictures cards to the metal pole.
ExampleI tell three friends I'm thinking of a number between 1 and 100, and I more info here write that number on a piece of paper and seal it in an envelope. My friends don't have to guess the exact number, they just must be the very first person to figure any number that is less than or equal to the number I'm thinking of.
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Let us say I am thinking of the number 19. If Friend A guesses 21, they shed because 21>19. If Friend B guesses 16 and Friend C guesses 12, then they've 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 closer to the target answer of 19. .
In Bitcoin terms, 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 decide by a simple majority--51%--that miner to honour. Typically, it is the miner that has done the most work, i.e.
The losing block then becomes an"orphan block." .
Now imagine that I present the"guess what number I am thinking of" question, but I am not asking only 3 friends, and I am not thinking of a number between 1 and 100. Instead, I am asking millions of would-be 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 answer.
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The number preceding 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's unpack the word"hexadecimal."
As you know, we use the"decimal" system, which means it's base 10. This in turn means that every digit has 10 chances, 0-9.