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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 try to spend both the real bill and the imitation one, someone who took the problem of looking at either of the invoices' consecutive numbers would observe that they were the exact same number, and thus one of them had to be false.

This isn't a great analogy--we'll explain in more detail below. .

Once a miner has confirmed 1 MB (megabyte) worthiness 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 believe the block size should be increased to accommodate more information.

Note that I stated that verifying 1 MB value of transactions makes a miner eligible to earn Bitcoin--not everyone who supports 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 information 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 issue. This process 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 difficult mathematical problems--that is not true at all. What they are 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 hash.

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The bad news: Since it is guesswork, you need a lot of computing power in order to get there first. To mine , you need to have a higher"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 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 their website 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 photo below is a makeshift, high-tech mining machine.  The cards are such rectangular blocks with whirring circles.  Note the sandwich twist-ties holding the graphics cards to the metal pole.

Example: I tell three friends that I'm thinking about a number between 1 and 100, and that I write that number on a sheet of paper and seal it in an envelope. My friends don't need to guess the exact number, they just have to be the first person to guess any number that is view it now less than or equal to the number I am thinking of.

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Let us say I am thinking about the number 19. If Friend A guesses 21they lose because 21>19. If Friend B guesses Extra resources 16 and Friend C guesses 12, then they have both theoretically arrived at viable answers, since 16<19 and 12<19. There's no"extra credit" for Friend B, even though B's answer was closer 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 that are equivalent to or less than the target number, the Bitcoin network will determine by a simple majority--51%--which miner to honour. Typically, it's the miner that has done the work, i.e.

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

Now imagine I pose the"figure what number I am thinking of" question, however I'm not asking only three friends, and I am not thinking of a 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 right answer.

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The number preceding has 64 digits. Easy enough to understand up to now. As you probably noticed, that number consists not only of numbers, but also letters of the alphabet. Why is that

In order to understand these letters are doing in the middle of numbers, let us unpack the term"hexadecimal."

As you knowwe use the"decimal" system, which means it is base 10. This in turn means that every digit has 10 chances, 0-9.