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If you want to join in the bitcoin frenzy without just 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 harder it is to mine profitably. .

Unlike paper currency, which is printed by governments and issued by banks, bitcoins do not arrive in any physical form. This makes a major hazard, as hackers could theoretically create 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 how blockchain transactions are structured, they are extremely tough to change or undermine, even from the best hackers. However, in order to protect these 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 track and secure transactions, miners earn bitcoins for each block they successfully procedure. .

The bitcoin founders have set a limit of 21 million bitcoins offered for mining. Once that amount is reached, miners will continue to have the ability to benefit from transaction fees, however they won't be granted bitcoins as a reward for their work. As of mid-January 2018, approximately 16.8 million of the 21 million bitcoins have already been mined.  Assuming the bitcoin mining industry doesn't change radically, it seems like we won't hit 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 sensible, because solving bitcoin transactions is becoming too difficult for your average computer to view publisher site 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 men and women have been bitcoin mining at any given time, then the network will be generous and share bitcoins readily in order to attain the predetermined number. However, now that bitcoin mining has become so widespread, the network is now 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) buy 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 some 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 simple to establish and utilize 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 this for a while.

And since 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 rig -- having to replace it every year or 2 takes a massive bite out of any profits you make from mining. Plus, most mining rigs consume enormous amounts of electricity, so you also have to subtract expense from official website the bitcoins you earn to determine your profits. .

If buying and maintaining your own mining hardware doesn't appeal to you, then cloud mining might be the way to go. Cloud mining companies invest in huge mining rigs, often filling entire data centers with the hardware, and then market subscriptions to individuals interested in dipping a toe into bitcoin mining.

The largest challenge facing cloud mining readers is avoiding fraud. The field is rife with pseudo-companies that sell thousands of multiyear subscriptions, pay out for a couple of months, and then vanish into the sunset. If you decide to try cloud mining, do your homework in advance and confirm that the company that 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 Network Solutions), in addition to any mining company that"guarantees" gains or provides huge incentives for referring new customers; anything above a 10% referral commission is profoundly suspicious, because valid mining pools simply don't generate a high enough profit margin to pay huge commissions. .