Bitcoin Trading History for Dummies

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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 try to spend both the true bill and the imitation one, someone that took the problem of looking at both of those bills' serial numbers would see that they had been 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 established by Satoshi Nakamoto, and is an issue of controversy, as some miners think the block size should be increased to accommodate more data.

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

1MB of transactions can technically be small as 1 transaction (though this is not in any way common) or several thousand. It depends on how much information the transactions consume.

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 right answer to some numeric problem. This practice is also known as an evidence of work.

The fantastic news: No advanced math or computation is involved. You may have heard that miners are solving challenging mathematical problems--that is not true in any way. 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 target hash.

 

 

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The bad news: Since it's guesswork, you need a lot of computing power in order to get there . To mine successfully, you need to have a high"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 could 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 cheap method 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 into the metal pole.

Case in point I tell three friends that 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 need to guess the specific number, they simply have to be the first person to guess any number that's less than or equal to the number I'm thinking of.

 

 

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Let us say I am thinking of the number 19. If Friend A guesses 21, they lose because 21>19. If Friend B guesses 16 and Friend C supposes 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 conditions, simultaneous answers happen frequently, but in the end of the day there can only be How To Make Money Through Blogging one winning answer. When multiple simultaneous answers are presented that are equal to or less than the target number, the Bitcoin network will determine by a simple majority--51 percent --which miner to honour. Normally, it's the miner who 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 that I pose the"figure what number I am thinking of" question, but I am not asking only 3 friends, and I'm not thinking of a number between 1 and 100. Instead, I am asking millions of would-be miners and I am thinking about a 64-digit hexadecimal number. Now you see that it's going to be extremely difficult to guess the ideal answer.

 

 

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The number above has 64 digits. Easy enough to understand so far. As you likely noticed, that number consists not only 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 us unpack the term"hexadecimal."

As you knowwe utilize the"decimal" system, which means it's base 10. This in turn means that every Get More Info digit has 10 chances, 0-9.

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