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If you want to join in the bitcoin frenzy with no simply buying the digital currency in today's inflated prices, then bitcoin mining is another way to become involved. But, mining bitcoins does 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, that is printed by governments and issued by banks, bitcoins do not come in any physical form. This makes a major hazard, as hackers can theoretically create bitcoins from nothing. Bitcoin mining is how the bitcoin network keeps its transactions secure.

Bitcoin transactions are secured by blockchains, which compose a public ledger of transactions. Because of the way blockchain transactions are structured, they are extremely tough to alter or compromise, even by the best hackers. But 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 effectively procedure. .

The bitcoin founders have put a limit of 21 million bitcoins offered for mining. Once that amount is reached, miners will still be able to benefit from transaction fees, but 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 already been mined.  Assuming that the bitcoin mining industry doesn't change radically, it seems like we won't hit 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 is no longer practical, 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 every 10 minutes. If only a few men and women have been 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 prevalent, the network is now much stingier about handing out bitcoins to miners.

Nowadays, in order to have a chance at being rewarding, miners need to adopt one of two approaches: 1) purchase technical 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 some other digital currency), set it up, you can check here 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 set up and utilize a bitcoin mining rig, actually making money on the course of action is something of a challenge. Since 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 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 massive bite from Fiat Crypto any profits you earn from mining. Plus, most mining rigs consume enormous amounts of electricity, which means you also have to subtract that expense in the bitcoins you earn to determine your profits. .

When buying and maintaining your own mining gear doesn't attract you, then cloud mining might be the best way to go. Cloud mining companies invest in huge mining rigs, often filling entire data centers with the hardware, and then market subscriptions to individuals interested in dipping a toe into bitcoin mining.

The largest challenge facing cloud mining subscribers is avoiding fraud. The field is rife with pseudo-companies which sell thousands of multiyear subscriptions, pay out for a couple of 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 true cloud miner and not a scheme.

Avoid companies with anonymous domain registration (you can check look up their registration info at Network Solutions), as well as any mining company that"guarantees" gains or provides enormous incentives for referring new customers; anything above a 10% referral commission is profoundly suspicious, because legitimate mining pools simply don't generate a large enough profit margin to pay big commissions. .