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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 will include expenses -- and dangers -- of its own. And the more popular bitcoins become, the harder it is to mine them profitably. .

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

Bitcoin transactions are secured with blockchains, which make up a public ledger of transactions. Due to how blockchain transactions are structured, they're extremely difficult to alter or compromise, even from the best 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 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 every block that they effectively process. .

The bitcoin founders have put a limit of 21 million bitcoins available for mining. Once that total is reached, miners will continue to be able to benefit from transaction fees, but they won't be granted bitcoins as a reward for their job. 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 dramatically, it looks like we won't hit 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 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 few 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 prevalent, the network has become much stingier about handing out bitcoins into miners.

These days, in order to have a chance in being rewarding, miners need to adopt one of two strategies: 1) purchase technical hardware his response (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 some 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 simple to set up and utilize a bitcoin mining rig, really 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 procedure continues to have more difficult and will probably keep doing so for some time.

And 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 two takes a huge bite from any gains you earn from mining. Plus, most mining channels consume enormous amounts of power, which means 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 attract you, then cloud mining might be the best way to go. Cloud mining companies invest in enormous mining rigs, often filling entire data centers with 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 that sell thousands of multiyear go to this web-site subscriptions, cover 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 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 over a 10% referral commission is profoundly suspicious, because legitimate mining pools simply don't generate a large enough profit margin to pay huge commissions. .