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

Unlike paper currency, that can be printed by governments and issued by banks, bitcoins do not come in any physical form. That creates a significant hazard, as hackers could theoretically produce bitcoins from nothing. Bitcoin mining is the way the bitcoin network retains its transactions protected.

Bitcoin transactions are secured by blockchains, which make up a public ledger of transactions. Due to how blockchain transactions are structured, they're extremely tough to change or undermine, even by the best hackers. However, in order to protect these transactions, someone needs to dedicate computing power to verifying the activity and packaging the facts in a block which 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 each block they successfully procedure. .

The bitcoin founders have put a limit of 21 million bitcoins offered for mining. Once that amount is reached, miners will continue to have the ability to benefit from transaction fees, however 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 looks like we won't hit the 21 million-bitcoin restrict 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 is becoming too hard for your computer to manage.

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The bitcoin network is designed to produce a certain number of new bitcoins every 10 minutes. If only a few men and women are bitcoin mining at any given time, then the network will probably be generous and share bitcoins easily in order to attain the predetermined number. But now this bitcoin mining has become so widespread, the network is now much stingier about handing out bitcoins into miners.

Nowadays, in order to have a chance at 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 begin with your own mining rig, you purchase hardware designed for mining bitcoin (or some 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 Get the facts involved.

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

And because bitcoin mining rigs aren't cheap -- expect to pay at least $1,000 for your hardware, or several times that for a top-quality rig -- having to replace it every year or two takes a massive bite out of any profits you earn from mining. Plus, most mining rigs consume enormous amounts of power, so you also have to subtract that expense from the bitcoins you earn to determine your own profits. .

When buying and maintaining your own mining hardware doesn't attract you, then cloud mining may be the way to go. Cloud mining companies invest in huge mining rigs, often filling entire data centers together with all 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 that sell thousands of multiyear subscriptions, pay out for a few 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 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 huge incentives for referring new clients; anything above a 10% referral commission is deeply suspicious, because legitimate mining pools just don't generate a high enough profit margin to pay huge commissions. .