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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 get involved. However, mining bitcoins does include expenses -- and dangers -- of its own. And also the more popular bitcoins become, the more difficult it is 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 form. This makes a major risk, as hackers could theoretically create bitcoins from nothing. Bitcoin mining is how the bitcoin network keeps its transactions secure.

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

The bitcoin founders have set a limit of 21 million bitcoins available 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, approximately 16.8 million of the 21 million bitcoins have already been mined.  Assuming that the bitcoin mining industry doesn't change radically, it looks like we won't reach 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 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 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. However, now that bitcoin mining has become so prevalent, the network is now much stingier about handing out bitcoins into 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 any other digital currency), set it up, and let it run 24/7 solving bitcoin transactions. Ideally, this will result in a continuous flow of payments without your needing to get involved.

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While it's fairly easy to set up and use a bitcoin mining rig, actually making money check here on the course of action is something of a challenge. Because more and more people are signing up for mine bitcoins, the mining procedure 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 the hardware, or even several times that to get a top notch rig -- having to replace it every year or 2 takes a huge bite from any gains you make from mining. Plus, most mining channels consume enormous amounts of power, so you also have to subtract that expense from the bitcoins you earn to determine your own 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 huge 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 subscribers is avoiding he has a good point fraud. The field is rife with pseudo-companies that sell thousands of multiyear subscriptions, pay out for a couple of months, and then vanish into the sunset. In case you decide to try 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), as well as any mining company that"guarantees" gains or offers huge incentives for referring new customers; anything over a 10% referral commission is profoundly suspicious, because legitimate mining pools simply don't generate a high enough profit margin to pay huge commissions. .