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If you want to join in the bitcoin frenzy with no simply buying the digital currency in today's inflated prices, then bitcoin mining is another way to get involved. However, mining bitcoins will include expenses -- and risks -- 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. That makes 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. Because of the way blockchain transactions are structured, they are extremely tough to alter or undermine, even by the top hackers. But in order to protect those transactions, someone needs to dedicate computing power to verifying the action and packaging the details 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 that they successfully procedure. .

The bitcoin founders have put a limit of 21 million bitcoins available for mining. Once that amount is reached, miners will still 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 already been mined.  Assuming that the bitcoin mining industry doesn't change radically, it looks like we won't hit on 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 practical, because solving bitcoin transactions is becoming too hard for web your average 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 couple men and women have been bitcoin mining at any given time, then the network will be generous and share bitcoins readily in order to reach the predetermined number. But now this bitcoin mining has become so widespread, the network is now much stingier about handing out bitcoins to miners.

These days, 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 some other digital currency), set it up, and let it run 24/7 solving bitcoin transactions. Ideally, this will result in a steady stream of payments with no needing to get involved.

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As soon as it's fairly easy to establish he said and use a bitcoin mining rig, actually making money on the course of action is something of a challenge. Because more and more people are signing up to mine bitcoins, the mining procedure continues to get more difficult and will probably keep doing this for a while.

And because 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 earn from mining. Plus, most mining channels consume enormous amounts of electricity, which means you also have to subtract that expense in the bitcoins you earn to determine your profits. .

When buying and maintaining your own additional reading mining hardware doesn't appeal to you, then cloud mining may be the best way to go. Cloud mining companies invest in enormous mining rigs, often filling entire information centers with all the hardware, and then sell subscriptions to individuals interested in dipping a toe into bitcoin mining.

The largest challenge facing cloud mining subscribers is avoiding fraud. The area is rife with pseudo-companies which sell thousands of multiyear subscriptions, pay out for a few months, and then vanish into the sunset. If you choose to try 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" profits or provides huge incentives for referring new customers; anything over a 10% referral commission is profoundly suspicious, because valid mining pools just don't generate a large enough profit margin to pay huge commissions. .