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If you want to join in the bitcoin frenzy without just 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 harder it would be to mine profitably. .

Unlike paper currency, that is printed by governments and issued by banks, bitcoins do not arrive in any physical type. This creates a significant 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. Because of how blockchain transactions are structured, they are extremely difficult 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 action and packaging the facts in a block which 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 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 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 dramatically, it seems like we won't reach on the 21 million-bitcoin limit until the year 2140. .

During the early 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 practical, because solving bitcoin transactions has become too difficult for your average computer to manage.

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The bitcoin network is designed to make a certain number of new bitcoins each 10 minutes. If only a few people are bitcoin mining at any given time, then the network will be generous and share bitcoins easily in order to reach the predetermined number. However, now this 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 in being rewarding, miners need to adopt one of two approaches: 1) buy specialized 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 virtual 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 use a bitcoin mining rig, actually 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 process continues to have more difficult and will likely keep doing this 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 massive bite out of any gains you make from mining. Plus, most mining channels consume enormous amounts of electricity, which means you also have to subtract that expense in the bitcoins you earn to determine your own profits. .

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

The largest challenge facing cloud mining readers is avoiding fraud. The area is rife with pseudo-companies that sell thousands of multiyear subscriptions, cover for a few months, and then vanish into the sunset. If 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), 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 just don't generate a large enough profit margin to pay big commissions. .