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If you want to join in the bitcoin frenzy without simply buying the digital currency at today's inflated prices, then bitcoin mining is another way to become involved. However, mining bitcoins does come with expenses -- and dangers -- of its own. And also the more popular bitcoins become, the more difficult it is to mine profitably. .

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

Bitcoin transactions are secured by blockchains, which compose a public ledger of transactions. Because of how blockchain transactions are structured, they're extremely difficult to change or compromise, even by the best hackers. However, in order to secure these 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 work to monitor and secure transactions, miners earn bitcoins for each block that they successfully procedure. .

The bitcoin founders have set a limit of 21 million bitcoins offered for mining. Once that amount is reached, miners will still be able 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 the 21 million bitcoins have been mined.  Assuming that 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 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 practical, because solving bitcoin transactions has become too hard for your 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 couple men and women are bitcoin mining at any given time, then the network will be generous and share bitcoins easily in order to reach the predetermined number. However, now this bitcoin mining has become so widespread, the network has become much stingier about handing out bitcoins to miners.

These days, in order to have a chance at being rewarding, 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 any other digital currency), set it up, and let it run 24/7 solving bitcoin transactions. Ideally, this will result in a steady stream of payments with no needing to get involved.

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As soon as it's fairly simple to set up and utilize a bitcoin mining check out this site rig, really making money on the process is something of a challenge. Since more and more people are signing up to mine bitcoins, the mining procedure continues to get more difficult and will probably keep doing this for a while.

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 notch rig -- having to replace it every year or two takes a massive bite from any gains you make from mining. Plus, most mining channels consume enormous amounts of electricity, which means you also have to subtract why not try this out that expense from the bitcoins you earn to determine your profits. .

If buying and maintaining your own mining gear doesn't appeal to you, then cloud mining may be the best way to go. Cloud mining companies invest in enormous 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 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 few months, and then vanish into the sunset. In case you choose to try out cloud mining, do your homework in advance and confirm that the company that 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 Network Solutions), as well as any mining company that"guarantees" profits or offers enormous incentives for click for source referring new customers; anything over a 10% referral commission is deeply suspicious, because legitimate mining pools simply don't generate a large enough profit margin to pay big commissions. .