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If you want to join in the bitcoin frenzy without just buying the digital currency in the inflated prices, then bitcoin mining is another way to get involved. However, mining bitcoins will come with expenses -- and risks -- of its own. And also 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 type. That makes a significant risk, as hackers can theoretically create bitcoins from nothing. Bitcoin mining is the way the bitcoin network retains its transactions protected.

Bitcoin transactions are secured by 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. But in order to secure these transactions, someone needs to dedicate computing power to verifying the action and packaging the details in a block that 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 offered for mining. Once that amount 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, approximately 16.8 million of the 21 million bitcoins have been mined.  Assuming that the bitcoin mining industry doesn't change radically, it seems like we won't hit the 21 million-bitcoin restrict until the year 2140. .

During the first 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 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 each 10 minutes. If only a couple 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. However, now this bitcoin mining has become so prevalent, the network is now much stingier about handing out bitcoins into miners.

Nowadays, in order to have a chance in being profitable, miners need to adopt one of two approaches: 1) buy specialized hardware (aka a bitcoin my blog mining rig) or 2) join a cloud mining pool. .

To get started with your own mining rig, you purchase hardware designed for mining bitcoin (or any 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 set up and utilize 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 your hardware, or several times that for a top notch 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 try here you also need to subtract that expense from the bitcoins you earn to determine your own profits. .

If buying and maintaining your own mining gear doesn't appeal to you, then cloud mining might be the way to go. Cloud mining companies invest in huge mining rigs, often filling entire data 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 about his readers is avoiding fraud. The field is rife with pseudo-companies that sell thousands of multiyear subscriptions, cover for a few 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 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 provides huge incentives for referring new customers; anything above a 10% referral commission is profoundly suspicious, because legitimate mining pools simply don't generate a large enough profit margin to pay huge commissions. .