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If you want to join in the bitcoin frenzy without just buying the digital currency in the inflated prices, then bitcoin mining is another way to become involved. However, mining bitcoins will come with expenses -- and dangers -- of its own. And also the more popular bitcoins become, the harder it would be to mine them profitably. .

Unlike paper currency, which can be printed by both governments and issued by banks, bitcoins do not come in any physical type. That makes a significant hazard, as hackers can theoretically produce bitcoins from nothing. Bitcoin mining is how the bitcoin network keeps its transactions protected.

Bitcoin transactions are secured with blockchains, which make up a public ledger of transactions. Because of how blockchain transactions are structured, they are extremely difficult to alter or undermine, even by the top hackers. However, in order to protect these 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 job to track and secure transactions, miners earn bitcoins for each 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 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 those 21 million bitcoins have been mined.  Assuming the bitcoin mining industry doesn't change dramatically, it seems like we won't hit the 21 million-bitcoin restrict until the year 2140. .

During the early 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 is no longer practical, because solving bitcoin transactions has become 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 probably be generous and discuss bitcoins easily in order to attain the predetermined number. However, now this bitcoin mining has become so prevalent, the network is now much stingier about handing out bitcoins to miners.

These days, in order to have a chance in 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 digital currency), set it up, and let it run 24/7 solving bitcoin transactions. Ideally, this will result in a continuous stream of payments with no needing to get involved.

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As soon as it's fairly easy to set up and utilize 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 for mine bitcoins, the mining process continues to get more difficult and will likely keep doing so for a while.

And because bitcoin mining rigs aren't cheap -- expect to pay at least $1,000 for your hardware, or several times that for a top notch rig -- having to replace it every year or two takes a huge bite from any gains you make from mining. Plus, most mining channels consume enormous amounts address of power, which means you also have to subtract that 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 might be the best way to go. Cloud mining companies invest in enormous mining channels, often filling entire information centers together with all the hardware, and then market 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 Website with pseudo-companies which sell thousands of multiyear subscriptions, cover for a couple of months, and then disappear into the sunset. In case you choose to try cloud mining, do your homework in advance and confirm that the company 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 at Network Solutions), as well as 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 just don't generate a large enough profit margin to pay big commissions. .