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

Unlike paper currency, that is printed by both governments and issued by banks, bitcoins do not arrive in any physical type. That creates a significant hazard, as hackers can 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 undermine, even from the top hackers. However, in order to protect those transactions, someone needs to dedicate computing power to verifying the activity and packaging the details 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 every block they successfully procedure. .

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 those 21 million bitcoins have already been mined.  Assuming the bitcoin mining industry doesn't change dramatically, 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's no longer practical, because solving bitcoin transactions is becoming too hard for your computer to manage.

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The 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 be generous and share bitcoins readily in order to attain the predetermined number. But now that bitcoin mining has become so widespread, the network is now much stingier about handing out bitcoins into miners.

These days, in order to have a chance at being profitable, miners Resources need to adopt one of two strategies: 1) purchase 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 digital currency), set it up, and let it run 24/7 solving bitcoin transactions. Ideally, this will result in a continuous stream of payments with no needing to get involved.

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As soon as it's fairly simple to establish and utilize a bitcoin mining rig, actually making money on the process is something of a challenge. Since more and more people are signing up visit this page 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 the hardware, or several times that for a top-quality rig -- having to replace it every year or two takes a huge bite from any profits you make from mining. Plus, most mining channels consume enormous amounts of power, which means you also have to subtract that expense from the bitcoins you earn to determine your profits. .

If buying and maintaining your own mining hardware doesn't appeal to you, then cloud mining may be the best way to go. Cloud mining companies invest in huge mining rigs, often filling entire data centers together with all the hardware, and then sell 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" profits or provides enormous incentives for referring new customers; anything above a 10% referral commission is deeply suspicious, because legitimate mining pools just don't generate a large enough profit margin to pay huge commissions. .