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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 attempt to spend both the true bill and the fake one, someone that took the trouble of looking at either of those bills' consecutive numbers would observe that they were the exact same number, and thus one of them had to be false.
That isn't a perfect 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 set by Satoshi Nakamoto, and can be an issue of controversy, as some miners think 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 eligible to earn Bitcoin--not everyone who verifies transactions will get paid off.
1MB of transactions can theoretically be as small as 1 transaction (although this is not at all common) or a few thousand. It depends on how much data the transactions consume.
In order to earn Bitcoin, you need to meet two conditions. One is a matter of work, one is a matter of luck.
2) You must be the first miner to reach the right answer to a numeric issue. This practice 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 difficult mathematical problems--that is 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 target 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 higher"hash speed," 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 pace, the website Cryptocompare offers 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 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 blocks with whirring circles. Note the sandwich twist-ties holding the pictures cards to the metal pole.
ExampleI tell three friends that I'm thinking of 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 exact number, they just must be the first person to figure any number that's less than or equal to the number I am thinking of.
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Let us 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 supposes 12, then they have both theoretically arrived at workable answers, since 16<19 and 12<19. There is no"extra credit" for Friend B, even though B's answer was closer to the goal 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 equivalent to or less than the target number, the Bitcoin network will decide by a simple majority--51 percent --that miner to honour. important source Typically, it's the miner who 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 am thinking of" question, however I'm not asking just 3 friends, and I'm not thinking of a published here number between 1 and 100. Rather, I am asking millions of would-be miners and I am thinking about a 64-digit hexadecimal number. Now you see that it's going to be extremely difficult to guess the ideal answer.
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The number above has 64 digits. Easy enough 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 center of numbers, let's unpack the term"hexadecimal."
As you knowwe utilize the"decimal" system, which means it is base 10. This in turn means that each and every digit has 10 possibilities, 0-9.