The 2-Minute Rule for Money To Bitcoin

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Let us say you had one legit $20 and one really good photocopy of that same $20. If someone were to attempt to spend both the true bill and the imitation one, someone who took the problem of looking at both of the bills' consecutive numbers would see that they were the exact same number, and consequently one of them needed to be fictitious.

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 think the block size ought to be increased to accommodate more data.

Note that I said that verifying 1 MB worth of transactions makes a miner eligible to earn Bitcoin--not everyone who supports transactions will get paid out.

1MB of transactions can technically be small as 1 transaction (although this is not at all 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 work, one is a matter of luck.

2) You must be the first miner to reach the right answer to some 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 challenging mathematical problems--that's not true in any way. What they are doing is trying to be the first miner to think of a 64-digit hexadecimal number (a"hash")  that is less than or equivalent to the target hash.

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The bad news: Because it's guesswork, you need a good deal of computing power in order to get there first. To mine , you need to have a higher"hash speed," 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 can mine with your mining rig's hash rate, the site Cryptocompare provides a very helpful calculator.

Either a GPU (graphics processing unit) miner or an application-specific integrated circuit (ASIC) miner. These can run from $500 into the tens of thousands.  Some miners--particularly Ethereum miners--buy individual graphics cards (GPUs) as a cheap method to cobble together mining operations.  The photograph below is a makeshift, high-tech mining machine.  The cards are those rectangular cubes with whirring circles.  Note the sandwich twist-ties holding the pictures cards into the metal pole.

Example: I tell three friends that I'm thinking about a number between 1 and 100, and I write that number on a piece of paper and seal it in an envelope. My friends don't need to guess the specific number, they just must be the first person to figure any number that's 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 supposes 16 and Friend C guesses 12, then they've both technically came at workable answers, since 16<19 and 12<19. There's no"extra credit" for Friend B, even though B's answer was nearer to the target answer of 19. .

In Bitcoin terms, simultaneous answers occur frequently, but at 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 decide by a simple majority--51%--which miner to honour. Normally, it's the miner that has done the most work, i.e.

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The losing block then becomes an"orphan block" .

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Now imagine I present 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. 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 quite hard to guess the right answer.

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The number preceding 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 these letters are doing in the middle of numbers, let's unpack the term"hexadecimal."

As you knowwe use the"decimal" system, which means recommended you read it's base 10. This in turn means that each and every digit has 10 possibilities, 0-9.

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