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If you want to join in the bitcoin frenzy without simply 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 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. That creates a major hazard, as hackers could theoretically produce bitcoins from nothing. Bitcoin mining is how the bitcoin network keeps its transactions protected.

Bitcoin transactions are secured by blockchains, which make up a public ledger of transactions. Due to the way blockchain transactions are structured, they're extremely difficult to change or compromise, even by the top hackers. But in order to secure these 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 monitor and secure transactions, miners earn bitcoins for every block they successfully process. .

The bitcoin founders have set a limit of 21 million bitcoins available for mining. Once that total is reached, miners will still 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 the 21 million bitcoins have already been mined.  Assuming 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 sensible, because solving bitcoin transactions is becoming too difficult for your 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 men and women are bitcoin mining at any given time, then the network will be generous and share go to my blog bitcoins easily in order to attain the predetermined number. However, now this bitcoin mining has become so prevalent, the network is now much stingier about handing out bitcoins to miners.

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

To get started with your own mining rig, you purchase 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 continuous flow of payments without your needing to get involved.

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While it's fairly simple 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 probably keep doing so for a while.

And because bitcoin mining rigs aren't cheap -- expect to pay at least $1,000 for the hardware, or several times that to get image source a top-quality rig -- having to replace it every year or 2 takes a huge bite out of any gains you make from mining. Plus, most mining rigs consume enormous amounts of electricity, which means you also need to subtract that expense in the bitcoins you earn to determine your own profits. .

If buying and maintaining your own mining hardware doesn't attract you, then cloud mining may be the way to go. Cloud mining companies invest in enormous mining rigs, often filling entire data centers together 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 that sell thousands of multiyear subscriptions, cover for a couple of months, and then vanish into the sunset. If you choose to try cloud mining, do your homework in advance and confirm that the company you're dealing with original site is a true cloud miner and not a scheme.

Avoid companies with anonymous domain registration (you can look up their registration info Network Solutions), in addition to 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. .