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If you want to join in the bitcoin frenzy with no just buying the digital currency at the inflated prices, then bitcoin mining is another way to become involved. But, mining bitcoins will include expenses -- and risks -- of its own. And also the more popular bitcoins become, the more difficult it is to mine them profitably. .

Unlike paper currency, which is printed by both governments and issued by banks, bitcoins do not come in any physical type. This creates a significant hazard, as hackers could theoretically produce bitcoins from nothing. Bitcoin mining is how the bitcoin network retains 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 alter or compromise, even from the top hackers. However, in order to secure those transactions, someone needs to dedicate computing power to verifying the action and packaging the details in a block which goes into the bitcoin ledger.

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As a reward for doing the job 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 job. As of mid-January 2018, roughly 16.8 million of the 21 million bitcoins have been mined.  Assuming that the bitcoin mining industry doesn't change dramatically, it looks like we won't hit the 21 million-bitcoin limit until the year 2140. .

During the first days of bitcoin mining, miners would often download a software bundle designed to allow their computers to process bitcoin transactions in the background. Unfortunately, that's no longer practical, because solving bitcoin transactions has become too difficult for your average computer to manage.

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The bitcoin network is designed to produce a certain number of new bitcoins each 10 minutes. If only a few men and women are bitcoin mining at any given time, then the network will probably be generous and share bitcoins easily in order to reach the predetermined number. But now this bitcoin mining has become so widespread, the network is now much stingier about handing out bitcoins to miners.

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

To begin with your own mining rig, you buy hardware designed for mining bitcoin (or some other virtual currency), set it up, and let it run 24/7 solving bitcoin transactions. Ideally, this will result in a continuous flow of payments with no needing to get involved.

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As soon as it's fairly simple to establish and utilize a bitcoin mining rig, actually making money on the process is something of a challenge. Because more and more people are signing up to mine bitcoins, the mining procedure continues to have more difficult and will probably keep doing this for some time.

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

When buying and maintaining your own mining hardware doesn't appeal to you, then cloud mining might be the best way to go. Cloud mining companies invest in huge mining channels, often filling entire information centers important site 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 subscribers is avoiding fraud. The find out field is rife with pseudo-companies which sell thousands of multiyear subscriptions, cover for a few months, and then vanish into the sunset. If you decide to try out cloud mining, do your homework in advance and confirm that the company you're dealing with is a true cloud miner and not a strategy.

Avoid companies with anonymous domain registration (you can look up their registration info at Network Solutions), in addition to any mining company that"guarantees" profits or offers enormous incentives for referring new customers; anything over a 10% referral commission is deeply suspicious, because valid mining pools simply don't generate a large enough profit margin to pay big commissions. .