How Bitcoins Are Made - Questions
Let us say you had one legit $20 and one really good photocopy of the same $20. If someone were to attempt to spend both the real bill and the fake one, someone who took the trouble of looking at both of those invoices' serial numbers would see that they had been exactly the exact same number, and consequently one of them had to be fictitious.
This 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 entitled 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 think the block size should be increased to accommodate more information.
Note that I stated that verifying 1 MB worth of transactions makes a miner qualified to earn Bitcoin--not everyone who verifies transactions will receive paid out.
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 information the transactions take up.
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 arrive at the perfect answer to a numeric problem. This practice is also known as an evidence of work.
The good news: No advanced math or computation is involved. You might have discovered that miners are solving difficult mathematical problems--that's not true at all. What they're 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: Since it is guesswork, you need a lot of computing power in order to get there . To mine successfully, you need to get 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 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 method 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 visit site pictures cards to the metal rod.
ExampleI tell three friends that I'm thinking of 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 have to guess the exact number, they simply must be the first person to figure any number that's less than or equal to the number I'm thinking of.
What Does How Bitcoins Are Made Mean?
Let's say I'm thinking about the number 19. If Friend A guesses 21they lose because 21>19. If Friend B guesses 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 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 which can be equivalent to or less than the target number, important source the Bitcoin network will decide by a simple majority--51 percent --which miner to honour. Typically, it's the miner who has done the work, i.e.
The losing block then becomes an"orphan block" .
Now imagine that I pose the"figure what number I'm thinking of" question, but I am not asking only three friends, and I'm not thinking of a number between 1 and 100. Instead, I'm 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 above has 64 digits. Easy enough to understand so far. As you probably 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 middle of numbers, let's 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.