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If you want to join in the bitcoin frenzy with no just buying the digital currency in today's inflated prices, then bitcoin mining is another way to get involved. But, mining bitcoins does include expenses -- and dangers -- of its own. And also the more popular bitcoins become, the more difficult it is to mine them profitably. .

Unlike paper currency, that is printed by both governments and issued by banks, bitcoins do not arrive in any physical type. That makes a major 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 by blockchains, which compose a public ledger of transactions. Because of the way blockchain transactions are structured, they are extremely tough to change or compromise, even from the best hackers. But 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 monitor and secure transactions, miners earn bitcoins for each block they successfully process. .

The bitcoin founders have put 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, approximately 16.8 million of the 21 million bitcoins have been mined.  Assuming that the bitcoin mining industry doesn't change dramatically, it seems like we won't hit on the 21 million-bitcoin limit 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 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 couple men and women are bitcoin mining at any given time, look at this now then the network will probably be generous and discuss bitcoins easily 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.

Nowadays, in order to have a chance in being rewarding, miners need to adopt one of two approaches: 1) buy technical 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 some 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 with no needing to get involved.

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As soon as 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. Because more and more people are signing up to mine bitcoins, the mining process continues to get 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 your hardware, or even several times that to get a top notch rig -- having to replace it every year or 2 takes a huge bite from any profits you make from mining. Plus, most mining rigs consume enormous amounts of electricity, so you also have 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 way to go. Cloud mining companies invest in enormous mining channels, 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 which sell thousands of multiyear subscriptions, cover for a couple of months, and then vanish into the sunset. If you decide to try out 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 provides huge incentives for referring new customers; anything above a 10% referral commission is deeply suspicious, because legitimate mining pools just don't generate a high enough profit margin to pay huge linked here commissions. .