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If you want to join in the bitcoin frenzy without just buying the digital currency in today's inflated prices, then bitcoin mining is another way to get involved. But, mining bitcoins will include expenses -- and risks -- of its own. And the more popular bitcoins become, the harder it would be to mine profitably. .

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

Bitcoin transactions are secured by blockchains, which compose a public ledger of transactions. Due to how blockchain transactions are structured, they're extremely tough to change or compromise, even from the top hackers. But in order to protect those 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 work to track and secure transactions, miners earn bitcoins for every block that they successfully procedure. .

The bitcoin founders have set 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 job. As of mid-January 2018, approximately 16.8 million of those 21 million bitcoins have been mined.  Assuming that the bitcoin mining industry doesn't change dramatically, it seems like we won't reach 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's no longer sensible, because solving bitcoin transactions is becoming too difficult for your computer to manage.

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The bitcoin network is designed to produce a certain number of new bitcoins each 10 minutes. If only a few people have been bitcoin mining at any given time, then the network will be generous and discuss bitcoins easily in order to reach the predetermined number. However, now this bitcoin mining has become so prevalent, the network is now much stingier about handing out bitcoins into miners.

These days, in order to have a chance at being profitable, miners need to adopt one of two strategies: 1) buy 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 some 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 with no needing to get involved.

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While it's fairly easy to set up and use 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 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 your hardware, or even several times why not try this out that to his explanation get a top-quality rig -- having to replace it every year or two takes a massive bite from any profits you earn from mining. Plus, most mining channels consume enormous amounts of power, which means you also have to subtract that expense in the bitcoins you earn to determine your profits. .

When buying and maintaining your own mining gear doesn't attract you, then cloud mining may be the best way to go. Cloud mining companies invest in enormous mining channels, often filling entire information centers with all the hardware, and then market 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 which sell thousands of multiyear subscriptions, cover 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 that 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), as well as any mining company that"guarantees" gains or offers enormous incentives for referring new customers; anything over a 10% referral commission is profoundly suspicious, because legitimate mining pools just don't generate a large enough profit margin to pay big commissions. .