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If you want to join in the bitcoin frenzy with no just buying the digital currency in 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 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 risk, as hackers could theoretically produce bitcoins from nothing. Bitcoin mining is the way the bitcoin network keeps its transactions secure.

Bitcoin transactions are secured with blockchains, which make up a public ledger of transactions. Due to how blockchain transactions are structured, they're extremely tough to alter or compromise, even from the best hackers. But in order to secure 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 job to track and secure transactions, miners earn bitcoins for every block they effectively process. .

The bitcoin founders have put a limit of 21 million bitcoins offered for mining. Once that total 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 the 21 million bitcoins have been mined.  Assuming the bitcoin mining industry doesn't change radically, it looks like we won't hit the 21 million-bitcoin limit 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 is no longer sensible, because solving bitcoin transactions is becoming too difficult for your computer to manage.

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The learn the facts here now bitcoin network is designed to produce a certain number of new bitcoins every 10 minutes. If only a couple men and women have been bitcoin mining at any given time, then the network will probably be generous and discuss bitcoins readily in order to attain the predetermined number. However, now this bitcoin mining has become so use this link widespread, the network has become much stingier about handing out bitcoins to miners.

These days, in order to have a chance at being rewarding, 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 purchase 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 steady flow of payments with no needing to get involved.

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As soon as it's fairly simple to establish 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 this for some time.

And because bitcoin mining rigs aren't cheap -- expect to pay at least $1,000 see this page for the 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 gains you earn from mining. Plus, most mining rigs consume enormous amounts of electricity, so you also need to subtract that expense from the bitcoins you earn to determine your profits. .

When buying and maintaining your own mining hardware doesn't appeal to you, then cloud mining may be the way to go. Cloud mining companies invest in enormous mining channels, often filling entire data centers with the hardware, and then market subscriptions to individuals interested in dipping a toe into bitcoin mining.

The largest 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 vanish 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 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" profits or offers enormous incentives for referring new clients; anything over a 10% referral commission is deeply suspicious, because valid mining pools just don't generate a large enough profit margin to pay big commissions. .