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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 more difficult it is to mine them profitably. .

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

Bitcoin transactions are secured with 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 from the top hackers. However, in order to protect these transactions, someone needs to dedicate computing power to verifying the action 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 each block they effectively process. .

The bitcoin founders have put a limit of 21 million bitcoins offered for mining. Once that total 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 those 21 million bitcoins have already been mined.  Assuming the bitcoin mining industry doesn't change dramatically, it seems like we won't hit on the 21 million-bitcoin limit until the year 2140. .

During the early 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 practical, 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 couple men and women are bitcoin mining at any given time, then the network will probably be generous and discuss bitcoins readily in order to attain the predetermined number. But now that 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 rewarding, miners need to adopt one of two approaches: 1) buy specialized 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 any other digital currency), set it up, and let it run 24/7 solving bitcoin transactions. Ideally, this will result in a steady flow of payments without your needing to get involved.

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While it's fairly simple to establish and utilize 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 have more difficult and will likely keep doing so for some time.

And since bitcoin mining rigs aren't cheap -- expect to pay at least $1,000 for your hardware, or even several times that for a top notch rig -- having to replace it every year or 2 takes a huge bite from any profits you make from mining. Plus, most mining rigs consume enormous amounts of electricity, so you also have her comment is here to subtract that expense in the bitcoins you earn to determine your own profits. .

When buying and maintaining your own mining gear doesn't attract you, then cloud mining may be the way to go. Cloud mining companies invest in enormous mining rigs, often filling entire information centers with the hardware, and then sell 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 subscriptions, cover for a few months, and then vanish into the sunset. If you decide to try out cloud mining, do your homework in advance and confirm that the company that More hints you're dealing with is a true 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 profoundly suspicious, because valid mining pools simply don't generate a large enough profit margin to pay big commissions. .