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If you want to join in the bitcoin frenzy without just buying the digital currency in today's inflated prices, then bitcoin mining is another way to get involved. However, mining bitcoins does include expenses -- and dangers -- of its own. And the more popular bitcoins become, the harder it is to mine profitably. .

Unlike paper currency, which can be printed by both governments and issued by banks, bitcoins do not come in any physical form. This makes a major hazard, as hackers could theoretically create bitcoins from nothing. Bitcoin mining is the way the bitcoin network keeps its transactions secure.

Bitcoin transactions are secured by blockchains, which compose a public ledger of transactions. Due to how blockchain transactions are structured, they're extremely difficult to change or compromise, even from the top hackers. However, in order to protect those transactions, someone needs to dedicate computing power to verifying the activity and packaging the facts in a block that goes into the bitcoin ledger.

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As a reward for doing the work to track and secure transactions, miners earn bitcoins for each block that they successfully process. .

The bitcoin founders have put a limit of 21 million bitcoins offered for mining. Once that amount is reached, miners will continue to have the ability to benefit from transaction fees, however they won't be granted bitcoins as a reward for their work. As of mid-January 2018, roughly 16.8 million of the 21 million bitcoins have been mined.  Assuming the bitcoin mining industry doesn't change radically, it seems like we won't reach on the 21 million-bitcoin restrict until the year 2140. .

During the first days of bitcoin mining, miners would often download a software package designed to allow their computers to process bitcoin transactions in the background. Unfortunately, that's no longer sensible, because solving bitcoin transactions is becoming too hard for your average computer to manage.

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The bitcoin network is designed to make a certain number of new bitcoins every 10 minutes. If only a few people are bitcoin mining at any given time, then the network will be generous and discuss bitcoins readily in order to attain the predetermined number. But now this bitcoin mining has become so prevalent, the network has become much stingier about handing out bitcoins into miners.

These days, in order to have a chance at being rewarding, miners need to adopt one of two strategies: 1) buy specialized hardware (aka a bitcoin mining rig) or 2) join a cloud mining pool. .

To begin with your own mining rig, you purchase hardware designed for mining bitcoin (or any other virtual currency), set it up, and let it run 24/7 solving bitcoin transactions. Ideally, this will result in a steady flow of payments without your needing to get involved.

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As soon as it's fairly simple to establish and use a bitcoin mining rig, really making money on the course of action is something of a challenge. Since more and more people are signing up for mine bitcoins, the mining procedure continues to get more difficult and will probably keep doing this for a while.

And because bitcoin mining rigs aren't cheap -- expect to pay at least $1,000 for the hardware, or several times that to get a top notch rig -- having to replace it every year or 2 takes a huge bite out of any gains you make from mining. Plus, most mining channels consume enormous amounts of electricity, which means you also need to subtract that expense from the bitcoins you earn to determine your own profits. .

If buying and maintaining your own mining hardware doesn't attract you, then cloud mining might be the way to go. Cloud mining companies invest in enormous mining channels, often filling entire data centers together with all the hardware, and then sell subscriptions to individuals interested in dipping a toe into bitcoin mining.

The largest challenge facing cloud mining readers is avoiding fraud. The field is rife with pseudo-companies which sell thousands of multiyear subscriptions, pay out see page for a few months, and then vanish into the sunset. If you choose to try cloud mining, do your homework in advance and confirm that the company that you're dealing with is a real cloud miner and not a strategy.

Avoid companies with anonymous domain registration (you can look up their registration info Network Solutions), in addition to any Get More Info mining company that"guarantees" profits or provides enormous incentives for referring new customers; anything over a 10% referral commission is profoundly suspicious, because legitimate mining pools just don't generate a high enough profit margin to pay huge commissions. .