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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 get involved. However, mining bitcoins does 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, which can be printed by both governments and issued by banks, bitcoins do not arrive in any physical type. That makes a significant hazard, as hackers can theoretically produce bitcoins from nothing. Bitcoin mining is how the bitcoin network retains its transactions protected.

Bitcoin transactions are secured with blockchains, which make up a public ledger of transactions. Due to the way blockchain transactions are structured, they're extremely difficult to alter or undermine, even from the top hackers. But in order to secure those transactions, someone needs to dedicate computing power to verifying the action 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 monitor and secure transactions, miners earn bitcoins for every block that they successfully process. .

The bitcoin founders have set 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 dramatically, it looks like we won't reach on the 21 million-bitcoin limit 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 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 every 10 minutes. If only a few people have been bitcoin mining at any given time, then the network will be generous and discuss bitcoins readily in order to attain the predetermined number. But now that bitcoin mining has become so prevalent, the network has become 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) purchase 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 any other digital currency), set it up, and let it run 24/7 solving bitcoin transactions. Ideally, this will result in a continuous flow of payments with no needing to get involved.

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As soon as it's fairly easy to set up and use a bitcoin mining Get More Info 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 procedure continues to get more difficult and will likely 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 several times that to get a top notch rig -- having to replace it every year or two takes a huge bite from any profits you make from mining. Plus, most mining rigs consume enormous amounts of power, which means you also have to subtract that expense in the bitcoins you earn to determine your own profits. .

When buying and maintaining your own mining hardware doesn't attract you, then cloud mining might 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 sell 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 that sell thousands of multiyear subscriptions, cover for a couple of months, and then vanish 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 real cloud miner and not a strategy.

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