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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 real bill and the imitation one, someone that took the trouble of looking at either of the invoices' serial numbers would observe that they were exactly the same number, and consequently one of them had to be fictitious.

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

Once a miner has confirmed 1 MB (megabyte) worthiness of Bitcoin transactions, they are entitled 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 believe the block size ought to be increased to accommodate more data.

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

1MB of transactions can technically be little as 1 transaction (although this is not in any way common) or a few 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 have to be the first miner to reach the perfect answer to a numeric problem. This practice is also known as a proof of work.

The good news: No advanced math or computation is involved. You may have heard that miners are solving difficult mathematical problems--that's 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")  that 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 high"hash rate," 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 rate, 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--especially Ethereum miners--purchase individual graphics cards (GPUs) as a low-cost method to cobble together mining operations.  The photograph below is a makeshift, high-tech mining machine.  The graphics cards are those rectangular blocks with whirring circles.  Note the sandwich twist-ties holding the pictures cards into the metal rod.

Example: I tell three friends I'm thinking of a number between 1 and 100, and I write that number on a piece of paper and seal it in my site an envelope. My friends don't have to guess the exact number, they simply have to be the first person to figure 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 viable answers, because 16<19 and 12<19. There is no"extra credit" for Friend B, even though B's answer was nearer to the goal 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 equivalent to or less than the target number, the Bitcoin network will determine 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 losing block then becomes an"orphan block." .

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Now imagine that I present the"figure what number I am thinking of" question, but I'm not asking just three friends, and I'm not thinking of a number between my explanation 1 and 100. Rather, I'm asking millions of prospective miners and I'm thinking of 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 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 word"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 chances, 0-9.

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