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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. However, mining bitcoins will come with expenses -- and dangers -- of its own. And the more popular bitcoins become, the more difficult it is to mine profitably. .

Unlike paper currency, that is printed by both governments and issued by banks, bitcoins do not arrive in any physical type. This makes a major hazard, as hackers could theoretically create bitcoins from nothing. Bitcoin mining is how the bitcoin network retains its transactions secure.

Bitcoin transactions are secured by blockchains, which make up a public ledger of transactions. Because of the way blockchain transactions are structured, they are extremely difficult to change or compromise, even from the top hackers. But in order to protect those transactions, someone needs to dedicate computing power to verifying the activity and packaging the facts in a block which 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 each block they successfully procedure. .

The bitcoin founders have put a limit of 21 million bitcoins available for mining. Once that total is reached, miners will still have the ability 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 looks like we won't hit 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 has become too hard for your average computer to manage.

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The bitcoin network is designed to make a certain number of new bitcoins each 10 minutes. If only a few people are bitcoin mining at any given time, then the network will be generous and share bitcoins readily in order to attain the predetermined number. However, now that bitcoin mining has become so widespread, the network is now much stingier about handing out bitcoins into miners.

Nowadays, website here in order to have a chance in being profitable, miners need to adopt one of two approaches: 1) purchase specialized hardware (aka a bitcoin mining rig) or 2) join a cloud mining pool. .

To get started 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 steady flow of payments without your needing to get involved.

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As soon as it's fairly easy to set up and use a bitcoin mining rig, actually making money on the course of action is something of a challenge. Since more and more people are signing up to mine bitcoins, the mining process continues to have more difficult and will probably keep doing this for a while.

And since bitcoin mining rigs aren't cheap -- expect to pay at least $1,000 for the hardware, or several times that for a top notch rig -- having to replace it every year or 2 takes a huge bite from any gains you earn from mining. Plus, most mining rigs consume enormous amounts of power, so you also need to subtract that expense in the bitcoins you earn to determine your profits. .

When buying and maintaining your own mining gear doesn't appeal to you, then cloud mining might be the website here best way to go. Cloud mining companies invest in huge mining rigs, often filling entire information centers together with the hardware, and then market subscriptions to individuals interested in dipping a toe into bitcoin mining.

The largest challenge facing cloud mining subscribers is avoiding fraud. The field is rife with pseudo-companies which sell thousands of multiyear subscriptions, cover for a couple of months, and then vanish into the sunset. If you decide to try out cloud mining, do your homework in advance and confirm that the company 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" gains or provides enormous incentives for referring new customers; anything above a 10% referral commission is profoundly suspicious, because valid mining pools just don't generate a high enough profit margin to pay huge commissions. .