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If you want to join in the bitcoin frenzy with no just buying the digital currency in today's inflated prices, then bitcoin mining is another way to get involved. However, mining bitcoins will include 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 both governments and issued by banks, bitcoins do not come in any physical type. That makes a significant risk, as hackers can theoretically create bitcoins from nothing. Bitcoin mining is how the bitcoin network retains its transactions protected.

Bitcoin transactions are secured with blockchains, which compose a public ledger of transactions. Due to the way blockchain transactions are structured, they are extremely tough to change or compromise, even by the top hackers. However, in order to secure those transactions, someone needs to dedicate computing power to verifying the action 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 they successfully process. .

The bitcoin founders have set 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 job. As of mid-January 2018, roughly 16.8 million of the 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 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 is no longer sensible, because solving bitcoin transactions is becoming too hard for your 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 few men and women have been bitcoin mining at any given time, then the network will probably be generous and share bitcoins easily in order to attain the predetermined number. But 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 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 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 simple to establish 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 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 the hardware, or even several times that for a top-quality rig -- having to replace it every year or 2 takes a huge bite out of any gains you make from mining. Plus, most mining channels consume enormous amounts of power, which means you also have to subtract expense in the bitcoins you earn to determine your profits. .

When buying and maintaining your own mining hardware doesn't attract you, then cloud mining might be the way to go. Cloud mining companies invest in enormous mining channels, often filling entire data centers together with the hardware, and then market subscriptions to individuals interested in dipping a toe into bitcoin mining.

The biggest challenge see this here 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 vanish into the sunset. If you decide to try cloud mining, do your homework in advance and confirm that the company that you're dealing with is a real 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 offers enormous incentives for referring new clients; anything above a 10% referral commission is deeply suspicious, because valid mining pools simply don't generate a high enough profit margin to pay big commissions. .