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

Unlike paper currency, which can be printed by both governments and issued by banks, bitcoins do not come in any physical form. This creates a major hazard, as hackers could theoretically produce 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. Because of how blockchain transactions are structured, they are extremely difficult to alter or compromise, even by the top hackers. But in order to protect those transactions, someone needs to dedicate computing power to verifying the activity 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 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 total is reached, miners will continue to have the ability to benefit from transaction fees, but they won't be granted bitcoins as a reward for their work. 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 radically, it looks like we won't reach on the 21 million-bitcoin limit until the year 2140. .

During the early 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 difficult for your average computer to manage.

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The bitcoin network is designed to make 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 share bitcoins readily in order to reach the predetermined number. But now this bitcoin mining has become so prevalent, the network has become much stingier about handing out bitcoins to miners. site here

Nowadays, in order to have a chance in being profitable, miners need to adopt one of two approaches: 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 without your needing to get involved.

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As soon as it's fairly simple to establish and utilize a bitcoin mining rig, really making money on the course of action is something of a challenge. Since more and more people are signing up for mine bitcoins, the mining procedure continues to have more difficult and will probably keep doing so for some time.

And because 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 huge bite out of any profits you make from mining. Plus, most mining rigs consume enormous amounts of power, so you also have to subtract that expense in the bitcoins you earn to determine your profits. .

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

The biggest challenge facing cloud mining subscribers is avoiding fraud. The field is rife with pseudo-companies that sell thousands of multiyear subscriptions, pay out for a couple of months, and then disappear 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 Network Solutions), as well as any mining company that"guarantees" gains or provides enormous incentives for referring new customers; anything above a 10% referral commission is profoundly suspicious, because legitimate mining pools just don't generate a high enough profit margin to pay huge commissions. .