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

Unlike paper currency, which can be printed by governments and issued by banks, bitcoins do not arrive in any physical form. That creates a major risk, as hackers could theoretically produce 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. Due to the way blockchain transactions are structured, they're extremely tough to alter or compromise, even by the best 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 work to track and secure transactions, miners earn bitcoins for every block they effectively procedure. .

The bitcoin founders have put a limit of 21 million bitcoins offered for mining. Once that total is reached, miners will continue to 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, roughly 16.8 million of those 21 million bitcoins have been mined.  Assuming that the bitcoin mining industry doesn't change radically, it looks like we won't reach on the 21 million-bitcoin restrict until the year 2140. .

During the early 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 is no longer practical, because solving bitcoin transactions is becoming 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 couple people are bitcoin mining at any given time, then the network will probably be generous and share bitcoins readily in order to reach the predetermined number. However, now that bitcoin mining has become so widespread, the network has become much stingier about handing out bitcoins into 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 begin with your own mining rig, you purchase hardware designed you can find out more 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 continuous try this out stream of payments with no needing to get involved.

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While it's fairly simple to establish and use a bitcoin mining rig, actually making money on the process is something of a challenge. Because more and more people are signing up to mine bitcoins, the mining procedure continues to have 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 for a top-quality rig -- having to replace it every year or 2 takes a massive bite from any gains you make from mining. Plus, most mining rigs consume enormous amounts of electricity, which means you also need to subtract that expense from the bitcoins you earn to determine your own 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 huge mining rigs, often filling entire data centers with all the hardware, and then sell subscriptions to individuals interested in dipping a toe into bitcoin mining.

The biggest challenge facing cloud mining subscribers is avoiding fraud. The area is rife with pseudo-companies which sell thousands of multiyear subscriptions, cover for a couple of months, and then disappear 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 true 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" gains or provides enormous incentives for referring new clients; anything above a 10% referral commission is profoundly suspicious, because legitimate mining pools simply don't generate a high enough profit margin to pay huge commissions. .