Getting The 20000 Satoshi To Work
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 true bill and the fake one, someone who took the trouble of looking at both of the bills' consecutive numbers would observe that they had been exactly the exact same number, and thus one of them had to be false.
That isn't a great analogy--we'll explain in more detail below. .
Once a miner has verified 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 a matter of controversy, as some miners believe the block size ought to be increased to accommodate more information.
Note that I stated 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 technically be little as 1 transaction (though 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 fulfill two conditions. One is a matter of effort, one is a matter of luck.
2) You must be the first miner to reach the perfect answer to a numeric issue. This practice is also known as a proof of work.
The good news: No advanced math or computation is involved. You might have heard that miners are solving challenging mathematical problems--that is not true at all. What they are doing is trying to be the first miner to come up with a 64-digit hexadecimal number (a"hash") that is less than or equivalent to the target hash.
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The bad news: Since it's guesswork, you need a good deal of dig this computing power in order to get there first. To mine , 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 how much Bitcoin you could mine with your mining rig's hash rate, 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 to the tens of thousands. Some miners--especially Ethereum miners--purchase individual graphics cards (GPUs) as a cheap way to cobble together mining operations. The photo 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 graphics cards to the metal rod.
ExampleI 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 exact number, they just must be the first person to guess any number that is less than or equal to this number I am 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 supposes 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 closer to the target answer of 19. .
In Bitcoin terms, simultaneous answers happen frequently, but at the end of the day there can only be one winning answer. When multiple simultaneous answers are presented that are equal to or less than the target number, the Bitcoin network will determine by a simple majority--51%--that miner to honour. Normally, it is the miner that 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'm thinking of" question, however 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 prospective miners and I'm thinking of a 64-digit hexadecimal number. Now you see that it's going to be extremely hard 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 just 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 us unpack the term"hexadecimal."
As you know, we use the"decimal" system, which means it's base 10. This in turn means that each and every digit has 10 possibilities, 0-9.