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If you want to join in the bitcoin frenzy with no just buying the digital currency at the inflated prices, then bitcoin mining is another way to become involved. However, mining bitcoins does come with expenses -- and risks -- of its own. And the more popular bitcoins become, the harder it is to mine them profitably. .

Unlike paper currency, which can be printed by both governments and issued by banks, bitcoins do not arrive in any physical type. That creates a major risk, as hackers can theoretically produce bitcoins from nothing. Bitcoin mining is the way the bitcoin network retains its transactions protected.

Bitcoin transactions are secured with blockchains, which make up a public ledger of transactions. Because of the way blockchain transactions are structured, they are extremely tough to alter or undermine, even by the best hackers. However, in order to protect those transactions, someone needs to dedicate computing power to verifying the activity 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 track and secure transactions, miners earn bitcoins for each block that they successfully process. .

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, however 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 been mined.  Assuming that the bitcoin mining industry doesn't change dramatically, it seems like we won't reach the 21 million-bitcoin restrict 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 is no longer practical, 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 discuss bitcoins readily in order to attain the predetermined number. But now that bitcoin mining has become so widespread, the network has become much stingier about handing out bitcoins to miners.

These days, in order to have a chance at being rewarding, miners need to adopt one of two strategies: 1) purchase specialized hardware (aka a bitcoin 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 digital currency), set it up, and let it run 24/7 solving bitcoin transactions. Ideally, this will result in a steady stream of payments without your needing to get involved.

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As soon as it's fairly simple 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 for mine bitcoins, the mining procedure continues to have more difficult and will probably 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 even several times that for a top-quality rig -- having to replace it every year or two takes a huge bite out of any hop over to these guys gains you earn from mining. Plus, most mining channels consume enormous amounts of power, which means you also have to subtract that expense from the bitcoins you earn to determine your own profits. .

If buying and maintaining your own mining hardware doesn't appeal to you, then cloud mining might be the best way to go. Cloud mining companies invest in enormous mining channels, often filling entire data centers 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, pay out for a few months, and then vanish into the sunset. In case you decide to try 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), as well as any mining company that"guarantees" gains or offers huge incentives for referring new clients; anything over a 10% referral commission is profoundly suspicious, because legitimate mining pools just don't generate a Website large enough profit margin to pay big commissions. .