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If you want to join in the bitcoin frenzy without simply buying the digital currency at the inflated prices, then bitcoin mining is another way to become involved. However, mining bitcoins does include expenses -- and dangers -- of its own. And also the more popular bitcoins become, the harder it would be to mine profitably. .

Unlike paper currency, that can be printed by both governments and issued by banks, bitcoins do not arrive in any physical form. This creates a significant hazard, as hackers can theoretically create 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 how blockchain transactions are structured, they're extremely tough to change or undermine, even from the best hackers. But in order to secure those transactions, someone needs to dedicate computing power to verifying the activity 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 that they effectively procedure. .

The bitcoin founders have put a limit of 21 million bitcoins offered for mining. Once that amount is reached, miners will continue to have the ability to benefit from transaction fees, but they won't be granted bitcoins as a reward for their work. As of mid-January 2018, approximately 16.8 million of those 21 million bitcoins have been mined.  Assuming that the bitcoin mining industry doesn't change dramatically, it looks like we won't reach on the 21 million-bitcoin limit until the year 2140. .

During the first 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 has become too hard for your computer to manage.

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The bitcoin network is designed to produce 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 probably be generous and discuss bitcoins readily in order to attain the predetermined number. However, now that bitcoin mining has become so widespread, the network has become much stingier about handing out bitcoins to miners.

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

To get started with your own mining rig, you buy 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 flow 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. Because more and more people are signing up to mine bitcoins, the mining procedure continues to have more difficult and will likely keep doing this for some time.

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 notch rig -- having to replace it every year or 2 takes a huge bite out of any gains you earn from mining. Plus, most mining rigs consume enormous amounts of electricity, which means you also need to subtract that expense from the bitcoins you earn to determine your own profits. .

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

The largest 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 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 strategy.

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 offers enormous incentives for referring new clients; anything over a 10% referral commission is profoundly suspicious, because valid mining pools just don't generate a high enough profit margin to pay big commissions. .