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If you want to join in the bitcoin frenzy without just buying the digital currency at the inflated prices, then bitcoin mining is another way to get involved. But, mining bitcoins will come with expenses -- and risks -- of its own. And the more popular bitcoins become, the more difficult it is to mine profitably. .

Unlike paper currency, which is printed by both governments and issued by banks, bitcoins do not arrive in any physical form. That makes a major risk, as hackers can theoretically create bitcoins from nothing. Bitcoin mining is how the bitcoin network retains its transactions secure.

Bitcoin transactions are secured with blockchains, which make up a public ledger of transactions. Due to the way blockchain transactions are structured, they are extremely difficult to alter or undermine, even from the top 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 which goes into the bitcoin ledger.

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As a reward for doing the work to monitor and secure transactions, miners earn bitcoins for each block they effectively process. .

The bitcoin founders have set a limit of 21 million bitcoins available for mining. Once that amount is reached, miners will continue to have the ability to benefit from transaction fees, however 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 dramatically, it seems like we won't reach on the 21 million-bitcoin restrict 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 is no longer practical, because solving bitcoin transactions has become too difficult for your computer to manage.

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The bitcoin network is designed to produce a certain number of new bitcoins every 10 minutes. If only a few men and women have been bitcoin mining at any given time, then the network will a fantastic read probably be generous and share bitcoins readily in order to attain the predetermined number. However, now this bitcoin mining has become so prevalent, the network has become much stingier about handing out bitcoins into miners.

Nowadays, in order to have a chance in being rewarding, 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 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 without like this your needing to get involved.

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As soon as it's fairly simple to establish and utilize a bitcoin mining rig, actually making money on the process is something of a challenge. Because 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 a while.

And since bitcoin mining rigs aren't cheap -- expect to pay at least $1,000 for your hardware, or even several times that to get a top notch rig -- having to replace it every year or 2 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 expense in the bitcoins you earn to determine your profits. .

When buying and maintaining your own mining gear doesn't appeal to you, then cloud mining may be the best way to go. Cloud mining companies invest in enormous mining rigs, 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 biggest challenge facing cloud mining readers is avoiding fraud. The area is rife with pseudo-companies that sell thousands of multiyear subscriptions, pay out for a few 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 that you're dealing with is a true 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" profits or provides enormous incentives for referring new customers; anything above a 10% referral commission is deeply suspicious, because legitimate mining pools just don't generate a large enough profit margin to pay huge commissions. .