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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 become involved. But, mining bitcoins will include expenses -- and dangers -- of its own. And also the more popular bitcoins become, the more difficult it is to mine profitably. .

Unlike paper currency, which can be printed by governments and issued by banks, bitcoins do not come in any physical form. This creates a significant hazard, as hackers can theoretically create bitcoins from nothing. Bitcoin mining is how the bitcoin network retains its transactions secure.

Bitcoin transactions are secured by blockchains, which make up a public ledger of transactions. Because of how blockchain transactions are structured, they are extremely difficult to alter or undermine, even from the top hackers. However, in order to protect those 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 successfully process. .

The bitcoin founders have set a limit of 21 million bitcoins available for mining. Once that total is reached, miners will continue to 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 seems like we won't hit on 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 sensible, because solving bitcoin transactions has become too hard for your average 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 people are bitcoin mining at any given time, then the network will probably be generous and share bitcoins easily 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 to miners.

These days, in order to have a chance in being rewarding, miners need to adopt one of two approaches: 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 any other virtual currency), set it up, and let it run 24/7 solving bitcoin transactions. Ideally, this will result in a continuous flow of payments with no needing to get involved.

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While it's fairly simple to establish and use 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 procedure continues to have more difficult and will probably keep doing so for a while.

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-quality rig -- having to replace it every year or two takes a massive bite out of any gains you earn from mining. Plus, most mining rigs consume enormous amounts of power, so you also have 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 might be the way to go. Cloud mining companies invest in enormous mining rigs, often filling entire information centers 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 area is rife with pseudo-companies that sell thousands of multiyear see this subscriptions, cover for a few months, and then vanish into the sunset. If you decide 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 at Network Solutions), in addition to any mining company that"guarantees" profits or provides enormous incentives for referring new customers; anything over a 10% referral commission is deeply suspicious, because legitimate mining pools simply don't generate a high enough profit margin to pay big commissions. .