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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 get involved. But, mining bitcoins does include expenses -- and risks -- of its own. And the more popular bitcoins become, the harder it is to mine them profitably. .

Unlike paper currency, that can be printed by governments and issued by banks, bitcoins do not come in any physical type. This creates a significant hazard, 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 compose a public ledger of transactions. Due to the way blockchain transactions are structured, they're extremely difficult to alter or undermine, even by the best hackers. But 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 monitor and secure transactions, miners earn bitcoins for each block they successfully process. .

The bitcoin founders have set a limit of 21 million bitcoins offered for mining. Once that total is reached, miners will continue to 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 limit 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 sensible, because solving bitcoin transactions is becoming 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 discuss bitcoins easily in order to reach the predetermined number. But now that bitcoin mining has become so widespread, the network is now much stingier about handing out bitcoins into miners.

Nowadays, in order to have a chance at being profitable, miners need to adopt one of two strategies: 1) buy 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 without your needing to get involved.

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As soon as it's fairly easy to establish and utilize a click here for more info bitcoin mining rig, actually 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 have more difficult and will probably 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 notch rig -- having to replace it every year or two takes a huge bite from any profits you make from mining. Plus, most mining channels consume enormous amounts of electricity, 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 huge mining channels, often filling entire data centers 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 area is rife with pseudo-companies that sell thousands of multiyear subscriptions, cover 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 that 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 at Network Solutions), in addition to any mining company that"guarantees" profits or provides enormous incentives for referring new customers; anything over a 10% referral commission is profoundly suspicious, because valid mining pools simply don't generate a high enough profit margin to pay big commissions. .