Excitement About How Bitcoins Are Made
Let's say you had one legit $20 and one really good photocopy of the same $20. If someone were to try to spend both the real bill and the imitation one, someone that took the problem of looking at either of those invoices' serial numbers would observe that they were the same number, and consequently one of them needed to be false.
This isn't a great analogy--we will explain in more detail below. .
Once a miner has verified 1 MB (megabyte) worthiness of Bitcoin transactions, they are entitled to win the 12.5 BTC. The 1 MB limit was established by Satoshi Nakamoto, and is an issue of controversy, as some miners believe the block size should be increased to accommodate more data.
Note that I said that verifying 1 MB worth of transactions makes a miner qualified to earn Bitcoin--not everyone who supports transactions will get paid out.
1MB of transactions can theoretically be as small as 1 transaction (although this is not in any way common) or several 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 right answer to some numeric problem. This process is also known as a proof of work.
The good news: No advanced math or computation is involved. You might have discovered that miners are solving difficult mathematical problems--that is not true in any way. What they're 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.
Excitement About Bitcoin Mining Code
The bad news: Since it's guesswork, you need a lot of computing power in order to get there first. To mine successfully, you need to get a higher"hash speed," 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 just how much Bitcoin you can mine with your mining rig's hash rate, the site Cryptocompare offers a very 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--purchase individual graphics cards (GPUs) as a low-cost way to cobble together mining operations. The photo below is a makeshift, home-made mining machine. The graphics cards are such rectangular cubes with whirring circles. Note the sandwich twist-ties holding the pictures cards into the metal pole.
Case in point : I tell three friends that I'm thinking of a number between 1 and 100, and that I write that number on a piece of paper and seal it in an envelope. My friends don't home need to guess the specific number, they just 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'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 have both technically came at viable 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 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 percent --which miner to honour. Typically, it is the miner who has done the most work, i.e.
The losing block then becomes an"orphan block." .
Now imagine that I present the"figure what number I am thinking of" question, but I'm not asking just 3 friends, and I am not thinking of a number between 1 and 100. Rather, I am asking millions of would-be miners and I am thinking about 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 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 center of numbers, let us unpack the word"hexadecimal."
As you knowwe utilize the"decimal" system, which means it is base 10. This in turn means that each and every digit has 10 possibilities, 0-9.