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If you want to join in the bitcoin frenzy without simply buying the digital currency at today's 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 harder it is to mine them profitably. .

Unlike paper currency, which can be printed by governments and issued by banks, bitcoins do not come in any physical form. This creates a significant hazard, as hackers can theoretically create bitcoins from nothing. Bitcoin mining is how the bitcoin network retains its transactions secure.

Bitcoin transactions are secured with blockchains, which compose a public ledger of transactions. Because of the way blockchain transactions are structured, they're extremely tough to change or compromise, even by the top 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 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 every block they effectively procedure. .

The bitcoin founders have put a limit of 21 million bitcoins offered for mining. Once that total 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 job. As of mid-January 2018, roughly 16.8 million of the 21 million bitcoins have already been mined.  Assuming the bitcoin mining industry doesn't change dramatically, it seems like we won't reach on the 21 million-bitcoin limit until the year 2140. .

During the early 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 hard 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 couple men and women have been bitcoin mining at any given time, then the network will be generous and share bitcoins easily in order to reach the predetermined number. But now that bitcoin mining has become so prevalent, the network is now much stingier about handing out bitcoins into miners.

These days, in order to have a chance in being profitable, miners need to adopt one of sites two approaches: 1) buy specialized hardware (aka a bitcoin mining rig) or 2) join a cloud mining pool. .

To begin with your own mining rig, you purchase hardware designed for mining bitcoin (or any other virtual currency), set it up, and let 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 easy to set up and utilize a click 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 process continues to get more difficult and will likely keep doing this for a while.

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 from any gains you make from mining. Plus, most mining rigs consume enormous amounts of power, which means 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 appeal to you, then cloud mining may be the way to go. Cloud mining companies invest in enormous mining channels, often filling entire information centers with 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 which sell thousands of multiyear subscriptions, cover for a few months, and then vanish into the sunset. If you choose to try out cloud mining, do your homework in advance and confirm that the company you're dealing with is a true cloud miner and not a go to this site strategy.

Avoid companies with anonymous domain registration (you can look up their registration info at Network Solutions), in addition to any mining company that"guarantees" gains or offers enormous incentives for referring new customers; anything over a 10% referral commission is profoundly suspicious, because valid mining pools just don't generate a large enough profit margin to pay big commissions. .