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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. But, mining bitcoins does come with expenses -- and dangers -- of its own. And also the more popular bitcoins become, the more difficult it is to mine profitably. .

Unlike paper currency, which can be printed by governments and issued by banks, bitcoins do not come in any physical form. That makes a major hazard, as hackers could theoretically produce bitcoins from nothing. Bitcoin mining is the way the bitcoin network keeps its transactions protected.

Bitcoin transactions are secured by blockchains, which make up a public ledger of transactions. Because of how blockchain transactions are structured, they're extremely difficult to change or undermine, even from the best hackers. But in order to protect those transactions, someone needs to dedicate computing power to verifying the action and packaging the facts in a block that 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 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 those 21 million bitcoins have already been mined.  Assuming the bitcoin mining industry doesn't change radically, it seems like we won't hit on the 21 million-bitcoin restrict 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's no longer sensible, because solving bitcoin transactions has become too difficult for your average 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 few people have been bitcoin mining at any given time, then the network will probably be generous and share bitcoins easily in order to attain the predetermined number. But now this bitcoin mining has become so widespread, the network is now much stingier about handing out bitcoins to learn this here now miners.

These days, in order to have a chance in being profitable, 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 buy hardware designed for mining bitcoin (or any other virtual currency), set it up, and let Learn More Here 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 simple to establish 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 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 own profits. .

When buying and maintaining your own mining gear doesn't attract you, then cloud mining might be the way to go. Cloud mining companies invest in huge mining rigs, often filling entire information centers together with the hardware, and then sell subscriptions to individuals interested in dipping a toe into bitcoin mining.

The biggest challenge facing cloud mining readers is avoiding fraud. The area is rife content with pseudo-companies that sell thousands of multiyear subscriptions, pay out for a couple of months, and then disappear into the sunset. If you choose 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 offers huge incentives for referring new customers; anything over a 10% referral commission is deeply suspicious, because valid mining pools just don't generate a high enough profit margin to pay huge commissions. .