How does Google Adsense determine fraud clicks?

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I recently added Adsense to all my websites and am just wondering how the folks at Adsense really track click activity and determine which are fraud clicks. I mean, I know that we are not supposed to click on our own ads, but what if we have friends and family who know that we are trying to make a bit of extra cash from our websites and decide to help us by clicking on a couple of ads each day? Would that be considered fraud? It is really vague and grey as to how Google determines fraud. If it is IP tracking that they use, how will they detect fraud on users with dynamic IP addresses? Many people have claimed that they made it rich through Adsense, I really wonder....