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

Unlike paper currency, which is printed by both governments and issued by banks, bitcoins do not arrive in any physical type. That creates a significant hazard, as hackers could theoretically create bitcoins from nothing. Bitcoin mining is the way the bitcoin network retains its transactions protected.

Bitcoin transactions are secured by blockchains, which compose a public ledger of transactions. Due to how blockchain transactions are structured, they're extremely tough to change or compromise, even by the best hackers. However, in order to secure these transactions, someone needs to dedicate computing power to verifying the action and packaging the facts in a block that goes into the bitcoin ledger.

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As a reward for doing the work to track and secure transactions, miners earn bitcoins for every block they successfully process. .

The bitcoin founders have set a limit of 21 million bitcoins offered for mining. Once that total 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 job. As of mid-January 2018, roughly 16.8 million of those 21 million bitcoins have been mined.  Assuming the bitcoin mining industry doesn't change radically, it seems like we won't reach the 21 million-bitcoin limit until the year 2140. .

During the early 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 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 few men and women are bitcoin mining at any given time, then the network will probably be generous and discuss bitcoins readily in order to reach the Recommended Reading predetermined number. However, now that bitcoin mining has become so prevalent, 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 strategies: 1) purchase specialized hardware (aka a bitcoin mining rig) or 2) join a cloud mining pool. .

To begin 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 continuous stream of payments with no needing to get involved.

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While it's fairly easy to establish 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 get more difficult and will likely keep doing this for some time.

And because bitcoin mining rigs aren't cheap -- expect to pay at least $1,000 for the hardware, or several times that for a top notch rig -- having to replace it every year or two takes a huge bite from any gains you make from mining. Plus, most mining rigs consume enormous amounts of electricity, which means you also need special info to subtract that expense in the bitcoins you earn to determine your profits. .

If buying and maintaining your own mining hardware doesn't appeal to you, then cloud mining might be the way to go. Cloud mining companies invest in huge mining rigs, often filling entire data centers with the hardware, and then market subscriptions to individuals interested in dipping a toe into bitcoin mining.

The biggest challenge facing cloud mining readers is avoiding fraud. The field is rife with pseudo-companies which sell thousands of multiyear subscriptions, cover for a few months, and then disappear into the sunset. If you decide 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), as well as any mining company that"guarantees" gains or offers huge incentives for referring new customers; anything above a 10% referral commission is profoundly suspicious, because legitimate mining pools simply don't generate a high enough profit margin to pay huge commissions. .