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

Unlike paper currency, which can be printed by both governments and issued by banks, bitcoins do not arrive in any physical form. That makes a major risk, as hackers could theoretically produce bitcoins from nothing. Bitcoin mining is how the bitcoin network retains its transactions secure.

Bitcoin transactions are secured with blockchains, which make up a public ledger of transactions. Due to the way blockchain transactions are structured, they're extremely tough to alter or undermine, even from the best hackers. But in order to protect those transactions, someone needs to dedicate computing power to verifying the activity and packaging the details 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 every block that they effectively process. .

The bitcoin founders have set a limit of 21 million bitcoins offered for mining. Once that amount is reached, miners will still have the ability to benefit from transaction fees, but they won't be granted bitcoins as a reward for their job. As of mid-January 2018, approximately 16.8 million of those 21 million bitcoins have been mined.  Assuming that the bitcoin mining industry doesn't change radically, it looks 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 bundle 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 produce a certain number of new bitcoins each 10 minutes. If only a couple men and women have been 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 that bitcoin mining has become so widespread, the network is now much stingier about handing out bitcoins into miners.

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

To get started with your own mining rig, you purchase hardware designed for mining bitcoin (or any other digital 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 easy to establish and use a bitcoin mining rig, really making money on the course of action is something of a challenge. Because more and more people are signing up to mine bitcoins, the mining process continues to get more difficult and will probably keep doing so for some time.

And since bitcoin mining rigs aren't cheap -- expect to pay at least $1,000 for your hardware, or even several times that to get a top-quality rig -- having to replace it every year or 2 takes a massive bite out of any profits you earn from mining. Plus, most mining rigs consume enormous amounts of electricity, so you also need to subtract expense in 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 may be the best way to go. Cloud mining companies invest in enormous mining rigs, often filling entire data centers with all the hardware, and then sell subscriptions to individuals interested in dipping a toe into bitcoin mining.

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

Avoid companies with anonymous domain registration (you can look up their registration info at Network Solutions), in addition to any mining company that"guarantees" gains or offers enormous check my blog incentives for referring new clients; anything over a 10% referral commission is profoundly suspicious, because legitimate mining pools just don't generate a large enough profit margin to pay huge commissions. .