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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 become involved. However, mining bitcoins does come with expenses -- and dangers -- of its own. And also the more popular bitcoins become, the harder it is to mine profitably. .

Unlike paper currency, that is printed by both governments and issued by banks, bitcoins do not arrive in any physical form. That makes a significant hazard, as hackers could theoretically produce bitcoins from nothing. Bitcoin mining is how the bitcoin network retains 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 difficult to change or compromise, even by the top hackers. But in order to secure those 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 every block that they effectively procedure. .

The bitcoin founders have set a limit of 21 million bitcoins offered for mining. Once that amount 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 those 21 million bitcoins have been mined.  Assuming that the bitcoin mining industry doesn't change radically, 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 package designed to allow their computers to process bitcoin transactions in the background. Unfortunately, that is no longer practical, because solving bitcoin transactions is becoming too difficult for your computer discover here 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 people have been bitcoin mining at any given time, then the network will 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 into miners.

These days, in order to have a chance at 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 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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As soon as it's fairly easy to establish and use 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 probably keep doing this for a while.

And because 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 two takes a massive bite out of any gains you earn from mining. Plus, most mining channels consume enormous amounts of power, which means you also need to subtract that expense in the bitcoins you earn to determine your profits. .

When buying and maintaining your own mining hardware doesn't appeal to you, then cloud mining might 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 largest challenge facing cloud mining readers is avoiding fraud. The field is rife with pseudo-companies that sell thousands of multiyear subscriptions, pay out 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 true cloud miner and not a strategy.

Avoid companies with anonymous domain registration (you can look up their registration info Network Solutions), in addition to any mining company that"guarantees" gains or offers enormous incentives for referring new clients; anything over a 10% referral commission is profoundly suspicious, because legitimate mining pools simply don't generate a large enough profit margin to pay big commissions. .