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If you want to join in the bitcoin frenzy with no simply buying the digital currency at today's 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 profitably. .

Unlike paper currency, that is printed by both governments and issued by banks, bitcoins do not arrive in any physical type. This creates a major hazard, as hackers could theoretically create bitcoins from nothing. Bitcoin mining is how the bitcoin network retains its transactions protected.

Bitcoin transactions are secured by blockchains, which make up a public ledger of transactions. Because of the way blockchain transactions are structured, they're extremely difficult to change or undermine, even from the top hackers. However, 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 every block that they effectively process. .

The bitcoin founders have put a limit of 21 million bitcoins offered for mining. Once that amount 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 the 21 million bitcoins have been mined.  Assuming that the bitcoin mining industry doesn't change radically, 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 package designed to allow their computers to process bitcoin transactions in the background. Unfortunately, that is no longer practical, because solving bitcoin transactions is becoming 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 every 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 this bitcoin mining has become so widespread, the network has become 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 strategies: 1) purchase specialized hardware (aka a bitcoin mining rig) or 2) join a cloud mining pool. .

To begin 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 continuous flow of payments without your needing to get involved.

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While it's fairly easy to set up and use 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 process continues to get more difficult and will likely keep doing so for some time.

And since bitcoin mining rigs aren't cheap -- expect to pay at least $1,000 for the hardware, or several times that to get a top-quality rig -- having to replace it every year or two takes a huge bite out of any gains you make from mining. Plus, most mining channels consume enormous amounts of power, so you also have to subtract that expense in 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 enormous mining channels, often filling entire data 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 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 disappear into the sunset. In case 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 click here to find out more 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 enormous incentives for referring new customers; anything over a 10% referral commission is profoundly suspicious, because valid mining pools simply don't generate a high enough profit margin to pay big commissions. .