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If you want to join in the bitcoin frenzy without simply 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 the more popular bitcoins become, the more difficult it would be to mine them profitably. .

Unlike paper currency, that can be printed by governments and issued by banks, bitcoins do not come in any physical form. That creates a major risk, as hackers can theoretically create bitcoins from nothing. Bitcoin mining is how the bitcoin network keeps 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're extremely tough to alter or undermine, even by the top 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 job to track and secure transactions, miners earn bitcoins for every block that they successfully process. .

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 the 21 million bitcoins have already been mined.  Assuming that the bitcoin mining industry doesn't change radically, it looks like we won't reach 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 is 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 every 10 minutes. If only a few men and women are bitcoin mining at any given time, then the network will be generous and discuss bitcoins readily in order to attain the predetermined number. However, now this bitcoin mining has become so widespread, the network is now much stingier about handing out bitcoins into miners.

Nowadays, in order to have a chance at being rewarding, miners need to adopt one of two strategies: 1) purchase 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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While it's fairly easy to establish and utilize 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 for mine bitcoins, the mining process continues to get more difficult and will probably keep doing this for some time.

And since bitcoin mining rigs aren't cheap -- click here for info expect to pay at least $1,000 for your hardware, or several times that to get a top notch rig -- having to replace it every year or 2 takes a huge bite from any gains you make from mining. Plus, most mining rigs consume enormous amounts of electricity, so you also need to subtract that expense in the bitcoins you earn to determine your profits. .

When buying and maintaining your own mining hardware 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 information centers with 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, pay out for a few months, and then vanish into the sunset. In case you choose to try 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), as well as any mining company that"guarantees" gains or offers huge incentives for referring new clients; anything above a 10% referral i was reading this commission is profoundly suspicious, because legitimate mining pools just don't generate a high enough profit margin to pay big commissions. .