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If you want to join in the bitcoin frenzy without just buying the digital currency in the inflated prices, then bitcoin mining is another way to become involved. But, mining bitcoins will include expenses -- and risks -- of its own. And also the more popular bitcoins become, the harder it would be to mine profitably. .

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

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

The bitcoin founders have set a limit of 21 million bitcoins offered for mining. Once that total is reached, miners will still 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 those 21 million bitcoins have already been mined.  Assuming the bitcoin mining industry doesn't change radically, it seems like we won't reach 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's no longer sensible, because solving bitcoin transactions has become too hard for your 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 people have been 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 this bitcoin mining has become so widespread, the network has become 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 two approaches: 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, directory this will result in a steady stream of payments without your needing to get involved.

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While it's fairly simple to set up and use a bitcoin mining rig, really making money on the process is something of a challenge. Since more and more people are signing up for mine bitcoins, the mining procedure continues to get more difficult and will likely keep doing so for a while.

And since bitcoin mining rigs aren't cheap -- expect to pay at least $1,000 for the hardware, or several times that for a top notch rig -- having to replace it every year or 2 takes a massive 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. .

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 huge 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 biggest challenge facing cloud mining subscribers is avoiding fraud. The area is rife with pseudo-companies that sell thousands of site link 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 that you're dealing with is a true cloud miner and not a scheme.

Avoid companies with anonymous domain registration (you can look up their registration info 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 deeply suspicious, because legitimate mining pools just don't generate a high enough profit margin to pay huge commissions. .