# All about How Bitcoins Are Made

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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 true bill and the fake one, someone who took the problem of looking at both of those bills' serial numbers would observe that they had been the same number, and thus one of them needed to be false.

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

Once a miner has confirmed 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 is a matter of controversy, as some miners think the block size ought to be increased to accommodate more information.

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 off.

1MB of transactions can theoretically be as little as 1 transaction (although this is not at all common) or a few thousand. It depends on how much data the transactions consume.

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 arrive at the perfect answer to a numeric issue. This practice is also known as an evidence 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 actually doing is trying to be the first miner to come up with a 64-digit hexadecimal number (a"hash") which is less than or equivalent to the 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 successfully, you need to have a higher"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 look these up could mine with your mining rig's hash rate, the site Cryptocompare provides a helpful calculator.

Either way 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--especially Ethereum miners--buy individual graphics cards (GPUs) as a low-cost way to cobble together mining operations. The photo below is a makeshift, high-tech mining machine. The graphics cards are such rectangular blocks with whirring circles. Note the sandwich twist-ties holding the graphics cards to the metal pole.

ExampleI tell three friends 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 specific number, they simply must be the first person to figure any number that is less than or equal to this number I'm thinking of.

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Let's say I am thinking of the number 19. If Friend A guesses 21they shed because 21>19. If Friend B guesses 16 and Friend C guesses 12, then they have both theoretically arrived 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 goal 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 which can be equal to or less than click for more the target number, the Bitcoin network will determine by a simple majority--51%--which miner to honour. Normally, it's the miner who has done the most work, i.e.

The losing block then becomes an"orphan block" .

Now imagine I present the"guess 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 prospective miners and I am thinking of a 64-digit hexadecimal number. Now you see that it is 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 likely noticed, that number consists not just of numbers, but also letters of the alphabet. Why is that

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

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