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If you want to join in the bitcoin frenzy with no simply buying the digital currency at today's inflated prices, then bitcoin mining is another way to get involved. But, mining bitcoins does come with 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, which is printed by both governments and issued by banks, bitcoins do not arrive in any physical type. This creates a significant hazard, as hackers could theoretically produce bitcoins from nothing. Bitcoin mining is the way the bitcoin network keeps 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 are extremely difficult to alter or compromise, even from the top hackers. But in order to secure those transactions, someone needs to dedicate computing power to verifying the activity and packaging the details in a block which 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 successfully procedure. .

The bitcoin founders have put a limit of 21 million bitcoins available for mining. Once that total 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 work. 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 looks 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's 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 each 10 minutes. If only a few men and women are bitcoin mining at any given time, then the network will probably be generous and share bitcoins readily in order to attain the predetermined number. But now this bitcoin mining has become so widespread, the network has become much stingier about handing out bitcoins to miners.

These days, in order to have a chance at being profitable, 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 some other virtual currency), set it up, and let it run 24/7 solving bitcoin transactions. Ideally, this will result in a see post continuous flow of payments with no needing to get involved.

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While it's fairly simple to set up and utilize my link a bitcoin mining rig, really making money on the process is something of a challenge. Because more and more people are signing up to mine bitcoins, the mining procedure continues to get more difficult and will likely keep doing so for a while.

And since bitcoin mining rigs aren't cheap -- expect to pay at least $1,000 for your hardware, or even several times that for a top notch rig -- having to replace it every year or 2 takes a massive bite from any gains you make from mining. Plus, most mining channels consume enormous amounts of electricity, which means you also need to subtract expense from the bitcoins you earn to determine your own profits. .

When buying and maintaining your own mining hardware doesn't appeal to wikipedia reference you, then cloud mining might be the way to go. Cloud mining companies invest in huge mining channels, often filling entire data centers together with all the hardware, and then market 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 which sell thousands of multiyear subscriptions, pay out for a couple of months, and then disappear into the sunset. In case you decide to try out cloud mining, do your homework in advance and confirm that the company you're dealing with is a true 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" profits or provides enormous incentives for referring new clients; anything over a 10% referral commission is profoundly suspicious, because legitimate mining pools just don't generate a high enough profit margin to pay big commissions. .