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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 them profitably. .

Unlike paper currency, which is printed by both governments and issued by banks, bitcoins do not come in any physical form. This creates a significant risk, as hackers could theoretically produce bitcoins from nothing. Bitcoin mining is the way the bitcoin network keeps its transactions protected.

Bitcoin transactions are secured with blockchains, which make up a public ledger of transactions. Because of how blockchain transactions are structured, they are extremely difficult to change or compromise, even by the top hackers. But in order to protect these transactions, someone needs to dedicate computing power to verifying the activity and packaging the facts 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 every block that they successfully process. .

The bitcoin founders have put a limit of 21 million bitcoins available for mining. Once that amount is reached, miners will still be able to benefit from transaction fees, however they won't be granted bitcoins as a reward for their work. As of mid-January 2018, approximately 16.8 million of the 21 million bitcoins have already 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's no longer practical, because solving bitcoin transactions has become too go to the website difficult for your 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 few men and women have been 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 widespread, 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 approaches: 1) buy technical 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 visit the website 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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While it's fairly easy to set up and use a bitcoin mining rig, really making money on the course of action is something of a challenge. Since more and more people are hop over to here signing up for mine bitcoins, the mining process continues to get more difficult and will likely 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 notch rig -- having to replace it every year or two takes a huge bite from any gains you earn from mining. Plus, most mining rigs consume enormous amounts of electricity, so you also have to subtract expense in the bitcoins you earn to determine your own profits. .

When buying and maintaining your own mining hardware doesn't attract you, then cloud mining might be the way to go. Cloud mining companies invest in enormous mining channels, often filling entire information centers together with all the hardware, and then sell subscriptions to individuals interested in dipping a toe into bitcoin mining.

The largest challenge facing cloud mining subscribers is avoiding fraud. The field is rife with pseudo-companies that sell thousands of multiyear subscriptions, cover for a couple of months, and then vanish into the sunset. If you choose to try out cloud mining, do 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), as well as any mining company that"guarantees" gains or offers enormous incentives for referring new clients; 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. .