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If you want to join in the bitcoin frenzy with no simply buying the digital currency in the inflated prices, then bitcoin mining is another way to get involved. But, mining bitcoins will come with expenses -- and risks -- of its own. And also the more popular bitcoins become, the harder it is to mine profitably. .

Unlike paper currency, which is printed by both governments and issued by banks, bitcoins do not arrive in any physical form. That makes a significant risk, as hackers can theoretically create bitcoins from nothing. Bitcoin mining is the way the bitcoin network keeps its transactions secure.

Bitcoin transactions are secured by blockchains, which make up a public ledger of transactions. Due to the way blockchain transactions are structured, they are extremely difficult to alter or undermine, even by 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 job to track and secure transactions, miners earn bitcoins for every block that they effectively procedure. .

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, however 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 hit on 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's 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 men and women are bitcoin mining at any given time, then the network will be generous and discuss bitcoins readily in order to attain the predetermined number. However, now that bitcoin mining has become so prevalent, the network has become much stingier about handing out bitcoins into miners.

Nowadays, in order to have a chance in 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 buy 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 continuous stream of payments without your needing to get involved.

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While it's fairly simple to establish and utilize a bitcoin mining rig, really making money on the process is something of a challenge. Because more and more people are signing up to mine bitcoins, the mining process continues to get more difficult and will probably keep doing so for some time.

And since bitcoin mining rigs aren't cheap -- expect to pay at least $1,000 for your hardware, or several times that to get a top-quality rig -- having to replace it every year or two takes a massive bite out of any gains you Fiat Crypto earn from mining. Plus, most mining channels consume enormous amounts of power, which means you also have to subtract expense in the bitcoins you earn to determine your profits. .

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

The largest challenge facing cloud mining readers is avoiding fraud. The field is rife with pseudo-companies that sell thousands of multiyear subscriptions, cover for a few 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 is a real 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" profits 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. .