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

Unlike paper currency, that is printed by governments and issued by banks, bitcoins do not arrive 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 retains its transactions protected.

Bitcoin transactions are secured by blockchains, which compose a public ledger of transactions. Due to the way blockchain transactions are structured, they're extremely tough to alter or undermine, even by the best hackers. However, 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 work to monitor and secure transactions, miners earn bitcoins for each block that they successfully process. .

The bitcoin founders have put a limit of 21 million bitcoins available for mining. Once that amount 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 that the bitcoin mining industry doesn't change radically, 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 package 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 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 have been bitcoin mining at any given time, then the network will probably be generous and share bitcoins easily in order to attain the predetermined number. But now this bitcoin mining has become so widespread, the network is now much stingier about handing out bitcoins to miners.

These days, in order to have a chance in being rewarding, miners need to adopt one of two strategies: 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 virtual 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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As soon as it's fairly simple to establish and use a bitcoin mining rig, really making money on the process is my blog something of a challenge. Because more and more people are signing up to mine bitcoins, the mining procedure continues to get 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 even several times that to get a top-quality rig -- having to replace it every year or two takes a huge bite out of any gains you make from mining. Plus, most mining rigs consume enormous amounts of electricity, so you also need to subtract expense in the bitcoins you earn to determine your profits. .

If buying and maintaining your own mining gear 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 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 which 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 you can try these out true cloud miner and not a strategy.

Avoid companies with anonymous Home Page domain registration (you can look up their registration info at Network Solutions), in addition to any mining company that"guarantees" profits or offers enormous incentives for referring new customers; anything over a 10% referral commission is deeply suspicious, because valid mining pools just don't generate a high enough profit margin to pay huge commissions. .