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If you want to join in the bitcoin frenzy with no just buying the digital currency at today's inflated prices, then bitcoin mining is another way to become involved. However, mining bitcoins will come with expenses -- and risks -- of its own. And the more popular bitcoins become, the more difficult it would be to mine them profitably. .

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

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 tough to alter or compromise, even by the best hackers. But in order to protect 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 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 available for mining. Once that amount is reached, miners will continue to have the ability to benefit from transaction fees, but 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 that the bitcoin mining industry doesn't change radically, it looks like we won't reach on the 21 million-bitcoin limit 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 sensible, because solving bitcoin transactions has become too difficult 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 few people are 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 has become much stingier about handing out bitcoins into miners.

These days, in order to have a chance at being profitable, 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 begin with your own mining rig, you purchase hardware designed for mining bitcoin (or some 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 simple to establish and use a bitcoin mining rig, really 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 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 even several times that for a top-quality rig -- having to replace it every year or two takes a huge bite out of any profits you earn from mining. Plus, most mining channels consume enormous amounts of power, so you also need 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 might be the best way to go. Cloud mining companies invest in enormous mining rigs, often filling entire data centers 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 fraud. The area visit the site is rife with pseudo-companies that sell thousands of multiyear subscriptions, pay out for a few months, and then disappear into the sunset. In case you choose to try out 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 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 valid mining pools simply don't generate a large enough profit margin to pay huge commissions. .