Getting My 20000 Satoshi To Work
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 trouble of looking at either of those invoices' serial numbers would see that they were exactly the same number, and consequently one of them had to be fictitious.
This 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 a matter of controversy, as some miners think the block size should be increased to accommodate more data.
Note that I stated that verifying 1 MB value of transactions makes a miner qualified to earn Bitcoin--not everyone who verifies transactions will receive paid off.
1MB of transactions can technically be small as 1 transaction (though this is not at all 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 work, one is a matter of luck.
2) You must be the first miner to arrive at the perfect answer to some numeric issue. This process is also known as a proof of work.
The fantastic news: No advanced math or computation is involved. You might have discovered that miners are solving challenging mathematical problems--that's 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 equal to the target hash.
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The bad news: Since it is guesswork, you need a lot of computing power in order to get there . To mine successfully, 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 can mine along with your mining rig's hash rate, the site Cryptocompare offers a helpful calculator.
Either 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 low-cost way to cobble together mining operations. The photograph below is a makeshift, high-tech mining machine. The cards are such rectangular blocks with whirring circles. Note the sandwich twist-ties holding the pictures cards into the metal rod.
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 have to be the very first person to figure any number that's less than or equal to this 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 supposes 16 and Friend C guesses 12, then they've both technically came at workable answers, because 16<19 and 12<19. There is no"extra credit" for Friend B, even though B's answer was nearer to the target answer of 19. .
In Bitcoin conditions, 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 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 that has done the most work, i.e.
The losing block then becomes an"orphan block" .
Now imagine that I present the"guess what number I am thinking of" question, but I'm not asking only three friends, and I am continue reading this not thinking of a number between 1 and 100. Rather, I am asking millions of would-be 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 right answer.
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The number preceding has 64 digits. Easy enough to understand up to now. As you likely noticed, that number consists not just 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's unpack the word"hexadecimal."
As you knowwe utilize the"decimal" system, which means it's base 10. This in turn means that each and every digit has 10 chances, 0-9.