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

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

Bitcoin transactions are secured with blockchains, which compose a public ledger of transactions. Because of the way blockchain transactions are structured, they're extremely difficult to change or compromise, even by the top hackers. But in order to secure these transactions, someone needs to dedicate computing power to verifying the activity 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 they effectively procedure. .

The bitcoin founders have set a limit of 21 million bitcoins available for mining. Once that total is reached, miners will still have the ability to benefit from transaction fees, however they won't be granted bitcoins as a reward for their work. As of mid-January 2018, roughly 16.8 million of the 21 million bitcoins have been mined.  Assuming 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 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 sensible, because solving bitcoin transactions is becoming 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 couple men and women are bitcoin mining at any given time, then the network will be generous and share bitcoins easily in order to reach the predetermined number. However, now that bitcoin mining has become so prevalent, the network is now much stingier about handing out bitcoins to miners.

Nowadays, in order to have a chance in being rewarding, miners need to adopt one of two strategies: 1) purchase specialized 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 virtual currency), set it up, and let it run 24/7 solving bitcoin transactions. Ideally, this will result in a steady flow of payments with no needing to get involved.

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

And since bitcoin mining rigs aren't cheap -- expect to pay at least $1,000 for your hardware, or several times that for a top notch rig -- having to replace it every year or 2 takes a huge bite out of any profits you make from mining. Plus, most mining channels consume enormous amounts of electricity, which means you also need to subtract expense from the bitcoins you earn to determine your own 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 huge mining rigs, often filling entire information centers 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 area is rife with pseudo-companies which sell thousands of multiyear subscriptions, cover for a couple of months, and then disappear into the sunset. In case you decide to try out cloud mining, do visit the website 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 at Network Solutions), in addition to any mining company that"guarantees" profits or provides huge incentives for referring new clients; anything above a 10% referral commission is profoundly suspicious, because legitimate mining pools just don't generate a high enough profit margin to pay huge commissions. .