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If you want to join in the bitcoin frenzy with no simply 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 more difficult it is to mine profitably. .

Unlike paper currency, that can be printed by both 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 keeps its transactions secure.

Bitcoin transactions are secured with blockchains, which make up a public ledger of transactions. Due to how blockchain transactions are structured, they're extremely difficult to alter or undermine, even by the top hackers. But 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 each block they successfully procedure. .

The bitcoin founders have set a limit of 21 million bitcoins available for mining. Once that amount 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 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 dramatically, it looks 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 bundle designed to allow their computers to process bitcoin transactions in the background. Unfortunately, that is no longer sensible, because solving bitcoin transactions is becoming too difficult for your average computer to manage.

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The bitcoin network is designed to make a certain number of new bitcoins each 10 minutes. If only a couple people are 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 that 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 in being profitable, miners right here need to adopt one of two approaches: 1) purchase 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 steady stream of payments with no needing to get involved.

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As soon as it's fairly simple to set up 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 process continues to have more difficult and will probably keep doing so for some time.

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

If buying and maintaining your own mining gear doesn't attract you, then cloud mining may be the best way to go. Cloud mining companies invest in huge mining rigs, often filling entire information centers together with the hardware, and then sell 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 which sell thousands of multiyear subscriptions, cover for a couple of months, and then vanish into the sunset. In case you decide to try cloud mining, do your homework in advance and confirm that the company 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 at Network Solutions), as well as any mining company that"guarantees" profits or provides huge incentives for referring new customers; 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. .