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If you want to join in the bitcoin frenzy with no simply buying the digital currency at the inflated prices, then bitcoin mining is another way to become involved. However, mining bitcoins will 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 both governments and issued by banks, bitcoins do not arrive in any physical type. This makes a major hazard, as hackers can theoretically create bitcoins from nothing. Bitcoin mining is how the bitcoin network keeps its transactions secure.

Bitcoin transactions are secured by blockchains, which compose a public ledger of transactions. Because of how blockchain transactions are structured, they are extremely tough to alter or undermine, even from the best hackers. But in order to secure these transactions, someone needs to dedicate computing power to verifying the activity 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 monitor and secure transactions, miners earn bitcoins for each block they successfully procedure. .

The bitcoin founders have set a limit of 21 million bitcoins available for mining. Once that total is reached, miners will still have the ability to benefit from transaction fees, however 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 the bitcoin mining industry doesn't change dramatically, it looks like we won't reach on the 21 million-bitcoin restrict 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 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 each 10 minutes. If only a few men and women are bitcoin mining at any given time, then the network will probably be generous and discuss bitcoins easily in order to reach the predetermined number. But now that bitcoin mining has become so widespread, the network is now 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 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 stream of payments with no 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 process is something of a challenge. Since more and more people are signing up for mine bitcoins, the mining process continues to get more difficult and will probably keep doing so for some time.

And since bitcoin mining rigs aren't cheap -- expect to pay at least $1,000 for your hardware, or several times that for a top notch rig -- having to replace it every year or two takes a huge bite out of 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. .

If buying and maintaining your own mining hardware doesn't appeal to you, then cloud mining may be the way to go. Cloud mining companies invest in huge mining rigs, often filling entire data centers with all the hardware, and then sell 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 which sell thousands of multiyear subscriptions, pay out for a couple of months, and then vanish into the sunset. In case 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 strategy.

Avoid companies with anonymous domain registration (you can look up their registration info at Network recommended you read Solutions), as well as any mining company that"guarantees" gains or offers huge incentives for referring new customers; anything above a 10% referral commission is deeply suspicious, because legitimate mining pools simply don't generate a high enough profit margin to pay huge commissions. .