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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 get involved. But, mining bitcoins does include expenses -- and dangers -- of its own. And also the more popular bitcoins become, the harder it is to mine profitably. .

Unlike paper currency, that can be printed by governments and issued by banks, bitcoins do not come in any physical form. 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 with blockchains, which compose a public ledger of transactions. Because of how blockchain transactions are structured, they are extremely difficult to alter or undermine, even by the best hackers. But in order to protect 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 work to track and secure transactions, miners earn bitcoins for each block that 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 the 21 million bitcoins have been mined.  Assuming that the bitcoin mining industry doesn't change radically, it seems like we won't reach 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'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 produce 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 discuss bitcoins readily in order to reach the predetermined number. However, now that bitcoin mining has become so prevalent, 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) 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 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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As soon as it's fairly easy to set up and utilize a bitcoin mining rig, actually making money on the process is something of a challenge. Because more and more people are signing up for mine bitcoins, the mining procedure continues to have more difficult and will probably keep doing so for some time.

And look here because 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 2 takes a massive bite from any profits you make from mining. Plus, most mining channels consume enormous amounts of power, which means you also have to subtract expense in the bitcoins you earn to determine your own profits. .

If buying and maintaining your own mining hardware doesn't appeal to you, then cloud mining might be the best way to go. Cloud mining companies invest in huge mining channels, often Resources filling entire information centers with all the hardware, and then market subscriptions to individuals interested in dipping a toe into bitcoin mining.

The largest challenge facing cloud mining readers 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 disappear into the sunset. In case you choose to try cloud mining, do your homework in advance and confirm that the company that 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 Network Solutions), as well as any mining company that"guarantees" profits or provides enormous incentives for referring new customers; anything above a 10% referral commission is deeply suspicious, because try this legitimate mining pools simply don't generate a high enough profit margin to pay big commissions. .