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Let us say you had one legit $20 and one really good photocopy of the same $20. If someone were to try to spend both the true bill and the fake one, someone that took the problem of looking at either of those bills' consecutive numbers would observe that they had been the exact same number, and consequently one of them had to be false.

That isn't a perfect analogy--we'll explain in more detail below. .

Once a miner has confirmed 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 is an issue of controversy, as some miners believe the block size ought to be increased to accommodate more data.

Note that I said that verifying 1 MB worth of transactions makes a miner qualified to earn Bitcoin--not everyone who supports transactions will get paid off.

1MB of transactions can technically be little 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 meet two conditions. One is a matter of effort, one is a matter of luck.

2) You have to be the first miner to arrive at the perfect answer to a numeric problem. This process is also known as an evidence of work.

The good 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 doing is trying to be the first miner to come up with 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 is guesswork, you need a good deal of computing power in order to get there first. To mine , you need to get a high"hash speed," 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 how much Bitcoin you could mine along with your mining rig's hash pace, the website Cryptocompare offers a helpful calculator.

Either way a GPU (graphics processing unit) miner or an application-specific integrated circuit (ASIC) miner. These can run from $500 this website to the tens of thousands.  Some miners--particularly Ethereum miners--purchase individual graphics cards (GPUs) as a cheap way to cobble together mining operations.  The photo below is a makeshift, high-tech mining machine.  The graphics cards are those rectangular cubes with whirring circles.  Note the sandwich twist-ties holding the graphics cards to the metal pole.

Case in point I tell three friends I'm thinking of a number between 1 and 100, and I write that number on a sheet of paper and seal it in an envelope. My friends don't have to guess the specific number, they simply 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'm 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 have both theoretically arrived at workable answers, because 16<19 and 12<19. There's no"extra credit" for Friend B, even though B's answer was nearer to the goal 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. Normally, it's the miner who has done the work, i.e.

The losing block then becomes linked here an"orphan block" .

Now imagine I pose the"guess what number I am thinking of" question, however I am not asking just three friends, and I am not thinking of a number between 1 and 100. Rather, I'm asking millions of would-be miners and I am thinking of a 64-digit hexadecimal number. Now you see that it's going to be quite difficult to guess the right answer.

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The number preceding has 64 digits. Easy enough to understand so far. As you likely noticed, that number consists not just 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's unpack the term"hexadecimal."

As you know, we utilize the"decimal" system, which means it is base 10. This in turn means that each and every digit has 10 possibilities, 0-9.