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

Unlike paper currency, which can be printed by both governments and issued by banks, bitcoins do not come in any physical type. That creates a significant risk, as hackers could theoretically produce bitcoins from nothing. Bitcoin mining is how the bitcoin network keeps its transactions secure.

Bitcoin transactions are secured by blockchains, which compose a public ledger of transactions. Because of how blockchain transactions are structured, they are extremely difficult to change or undermine, even from the best hackers. However, in order to secure these transactions, someone needs to dedicate computing power to verifying the action and packaging the details 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 every block they successfully procedure. .

The bitcoin founders have put a limit of 21 million bitcoins available 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 work. As of mid-January 2018, roughly 16.8 million of the 21 million bitcoins have been mined.  Assuming the bitcoin mining industry doesn't change radically, it looks like we won't reach 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 sensible, because solving bitcoin transactions is becoming 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 every 10 minutes. If only a few men and women are bitcoin mining at any given time, then the network will probably 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.

Nowadays, in order to have a chance at being profitable, miners need to adopt one of two approaches: 1) purchase technical hardware Home Page (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, useful content this will result in a steady flow of payments without your needing to get involved.

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While it's fairly easy to set up and use a bitcoin mining rig, really making money on the course of action is something of a challenge. Since more and more people are signing up for mine bitcoins, the mining procedure continues to get more difficult and will likely keep doing so for a while.

And since bitcoin mining rigs aren't cheap -- expect to pay at least $1,000 for your hardware, or several times that for a top-quality rig -- having to replace it every year or 2 takes a massive bite from any gains you earn 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. .

When buying and maintaining your own mining hardware doesn't appeal to you, then cloud mining might be the 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, pay out for a few months, and then vanish into the sunset. If 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 strategy.

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