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If you want to join in the bitcoin frenzy without just buying the digital currency in today's inflated prices, then bitcoin mining is another way to become involved. However, mining bitcoins will include expenses -- and risks -- of its own. And the more popular bitcoins become, the more difficult it is to mine profitably. .

Unlike paper currency, which can be printed by both governments and issued by banks, bitcoins do not arrive in any physical type. This creates a significant hazard, as hackers can 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 are extremely difficult to change or compromise, even from the best hackers. However, in order to secure those transactions, someone needs to dedicate computing power to verifying the activity and packaging the facts 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 each block that they successfully process. .

The bitcoin founders have set a limit of 21 million bitcoins offered for mining. Once that total is reached, miners will continue to have the ability to benefit from transaction fees, but they won't be granted bitcoins as a reward for their work. As of mid-January 2018, roughly 16.8 million of the 21 million bitcoins have been mined.  Assuming that the bitcoin mining industry doesn't change radically, it seems like we won't hit 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 is no longer practical, because solving bitcoin transactions has become too difficult for your average computer to manage.

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The bitcoin network is designed to produce a certain number of new bitcoins each 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 discuss bitcoins easily click over here now in order to reach the predetermined number. But now that bitcoin mining has become so prevalent, the network Full Article is now much stingier about handing out bitcoins to miners.

Nowadays, in order to have a chance in being profitable, miners need to adopt one of two strategies: 1) purchase technical 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 any 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 easy to set up and utilize a bitcoin mining rig, really making money on the process is something of a challenge. Since more and more people are signing up for mine bitcoins, the mining process continues to have more difficult and will likely keep doing this for some time.

And because bitcoin mining rigs aren't cheap -- expect to pay at least $1,000 for your hardware, or even several times that to get a top notch check my blog rig -- having to replace it every year or 2 takes a huge bite from any profits you earn from mining. Plus, most mining rigs consume enormous amounts of electricity, so you also have to subtract expense from 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 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 subscribers 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 disappear into the sunset. In case you choose to try 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 at Network Solutions), in addition to any mining company that"guarantees" gains or provides enormous incentives for referring new clients; anything above a 10% referral commission is profoundly suspicious, because legitimate mining pools just don't generate a large enough profit margin to pay huge commissions. .