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

Unlike paper currency, which is printed by governments and issued by banks, bitcoins do not arrive in any physical type. This makes a significant risk, as hackers could theoretically produce bitcoins from nothing. Bitcoin mining is how the bitcoin network retains its transactions protected.

Bitcoin transactions are secured with blockchains, which make up a public ledger of transactions. Due to the way blockchain transactions are structured, they are extremely tough to alter or compromise, even by the best hackers. However, in order to secure these transactions, someone needs to dedicate computing power to verifying the activity and packaging the facts in a block that 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 successfully procedure. .

The bitcoin founders have set a limit of 21 million bitcoins offered for mining. Once that total is reached, miners will continue to be able to benefit from transaction fees, but 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 limit 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 practical, because solving bitcoin transactions is becoming too hard for your average 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 share bitcoins easily 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.

These days, in order to have a chance in being profitable, miners need to adopt one of two strategies: 1) purchase technical hardware (aka a bitcoin mining rig) or 2) join check my reference a cloud mining pool. .

To begin with your own mining rig, you buy hardware designed for mining bitcoin (or some 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 easy to establish and use a bitcoin mining rig, actually making money on the course of action is something of a challenge. Because more and more people are signing up for mine bitcoins, the mining procedure continues to get more difficult and will likely keep doing this 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-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 electricity, which means you also have to subtract that expense in the bitcoins you earn to determine your profits. .

If buying and maintaining your own mining gear doesn't appeal to you, then cloud mining may be the way to go. Cloud mining find out here companies invest in huge mining rigs, often filling entire information centers with 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, pay out for a few 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 that 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), as well as any mining company that"guarantees" gains or provides enormous incentives for referring new customers; anything above a 10% referral commission is deeply suspicious, because valid mining pools simply see this site don't generate a high enough profit margin to pay big commissions. .