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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. However, mining bitcoins does include expenses -- and risks -- of its own. And 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 come in any physical form. This creates a major hazard, as hackers can theoretically produce bitcoins from nothing. Bitcoin mining is the way the bitcoin network keeps 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 undermine, even by the best hackers. However, in order to secure these 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 job to track and secure transactions, miners earn bitcoins for each block that they successfully procedure. .

The bitcoin founders have set a limit of 21 million bitcoins available for mining. Once that amount is reached, miners will still 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 those 21 million bitcoins have already been mined.  Assuming the bitcoin mining industry doesn't change radically, it looks like we won't reach 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 average 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 be generous and share bitcoins readily in order to reach the predetermined number. However, now that bitcoin mining has become so prevalent, 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 get started 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 flow of payments without your needing to get involved.

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While it's fairly easy to set up and utilize 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 for mine bitcoins, the mining procedure continues to have more difficult and will probably keep doing this for a while.

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

When buying and maintaining your own mining gear doesn't attract you, then cloud mining may be the best way to go. Cloud mining companies invest in huge mining rigs, often filling entire information centers together 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 field is rife with pseudo-companies that sell thousands of multiyear subscriptions, pay out for a couple of months, and then vanish 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 real cloud miner and not a scheme.

Avoid companies with anonymous domain registration (you can look up their registration info at Network Solutions), as well as any mining company that"guarantees" profits or provides enormous incentives for referring new customers; anything above a 10% referral commission is have a peek at this website profoundly suspicious, because valid mining pools just don't generate a large enough profit margin to pay big commissions. .