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If you want to join in the bitcoin frenzy without simply buying the digital currency at the inflated prices, then bitcoin mining is another way to become involved. However, mining bitcoins does include expenses -- and risks -- of its own. And the more popular bitcoins become, the harder it would be to mine profitably. .

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

Bitcoin transactions are secured with blockchains, which compose a public ledger of transactions. Because of how blockchain transactions are structured, they're extremely difficult to change or undermine, even from the best hackers. But in order to protect these transactions, someone needs to dedicate computing power to verifying the action 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 monitor and secure transactions, miners earn bitcoins for each block that they successfully procedure. .

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 those 21 million bitcoins have already been mined.  Assuming the bitcoin mining industry doesn't change dramatically, 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 practical, because solving bitcoin transactions has become too hard for your 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 couple people have been bitcoin mining at any given time, then the network will probably be generous and discuss bitcoins readily in order to attain the predetermined number. But now this bitcoin mining has become so widespread, the network is now much stingier about handing this content out bitcoins to 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 some other virtual currency), set it up, and let it run 24/7 solving bitcoin transactions. Ideally, this will result in a continuous stream 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 process is something of a challenge. Because more and more people are signing up for mine bitcoins, the mining procedure continues to have 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 blog here even several times that to get a top notch rig -- having to replace it every year or 2 takes a huge bite out of any profits you earn from mining. Plus, most mining channels consume enormous amounts of power, so you also have to subtract expense from the bitcoins you earn to determine your profits. .

When buying and maintaining your own mining gear 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 together 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 area is rife with pseudo-companies which sell thousands of multiyear subscriptions, cover for a few months, and then disappear into the sunset. In case you decide 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 scheme.

Avoid companies with anonymous domain registration (you can look up their registration info Network Solutions), in addition to any mining company that"guarantees" gains or offers 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. .