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If you want to join in the bitcoin frenzy with no simply buying the digital currency at today's inflated prices, then bitcoin mining is another way to become involved. But, mining bitcoins will come with expenses -- and risks -- of its own. And the more popular bitcoins become, the more difficult it would be to mine them profitably. .

Unlike paper currency, that is printed by governments and issued by banks, bitcoins do not arrive in any physical form. That creates a major risk, as hackers can theoretically produce bitcoins from nothing. Bitcoin mining is the way the bitcoin network keeps its transactions secure.

Bitcoin transactions are secured by blockchains, which make up a public ledger of transactions. Due to the way blockchain transactions are structured, they are extremely difficult to change or undermine, even from the top hackers. But in order to secure these transactions, someone needs to dedicate computing power to verifying the action and packaging the details in a block which 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 that they effectively process. .

The bitcoin founders have put a limit of 21 million bitcoins offered 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 the 21 million bitcoins have already been mined.  Assuming the bitcoin mining industry doesn't change radically, it seems like we won't hit the 21 million-bitcoin restrict 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 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 people have been bitcoin mining at any given time, then the network will probably be generous and discuss bitcoins readily in order to reach the predetermined number. But now this 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 at being profitable, miners need to adopt one of two strategies: 1) buy technical hardware (aka a bitcoin mining rig) or 2) join a cloud mining pool. . their explanation

To get started with your own mining rig, you buy hardware designed for mining bitcoin (or any other virtual 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 utilize a bitcoin mining rig, really 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 get more difficult and will likely keep doing so for some time.

And since bitcoin mining rigs aren't cheap -- expect to pay at least $1,000 for the hardware, or even 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 make from mining. Plus, most mining rigs consume enormous amounts of power, so you also need to subtract that 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 may be the best way to go. Cloud mining companies invest in huge 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 biggest challenge facing cloud mining readers is avoiding fraud. The area is rife with pseudo-companies that sell important source thousands of multiyear subscriptions, cover for a couple of months, and then disappear into the sunset. In case you choose to try out cloud mining, do your homework in advance and confirm that the company 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" look at this website gains or offers huge incentives for referring new clients; anything above a 10% referral commission is deeply suspicious, because legitimate mining pools simply don't generate a high enough profit margin to pay big commissions. .