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Legitimate miners and buyers need to incur substantial production and energy expenses, or need to pay the going exchange rates for bitcoins.

Criminal miners pay virtually nothing for the production of new coins, outsourcing the job to hapless victim machines the world over. Criminal bitcoin thieves don't incur the exchange rate cost for acquisition of bitcoins. They simply rely on hacking and malware to siphon bitcoin wallets from law-abiding owners.

What we've got here, then, is a commodity (I hesitate to call it a currency) that has a current price, is absolutely free from regulation (for the moment), allows for completely anonymous ownership, and is both highly rewarding and nearly free to produce (if you're willing to violate the law).

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There's no doubt the bitcoin has staying power, but if that's just among criminals (and those who would like to traffic with them, like the Silk Road medication sellers and customers), or whether it is going to become a valuable trading commodity for the rest of us is unclear.

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My information to law enforcement is easy: follow the bitcoin. There is no doubt that more and more criminals will be using bitcoin to generate gain as well as cover their tracks. Whenever you see a stash of bitcoin and have judicial permission to follow the footprints, do so.

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While bitcoin use is not confined to criminals, there's an undeniably large correlation between bitcoin ownership and criminal action. Notably since bitcoins are becoming increasingly more profitable to criminal malware seeders and botnet operators while concurrently becoming ever less profitable for legitimate traders.

Here is the vital take-away: bitcoins are becoming the most"national currency" of criminals the world over and are becoming an increasingly inadequate investment for valid miners.

Cryptocurrency mining is painstaking, expensive, and only sporadically rewarding. Nonetheless, mining includes a magnetic attraction for many investors interested in cryptocurrency. This may be because entrepreneurial types see mining as pennies from heaven, like California gold prospectors in 1848. And If You're technologically inclined, why not take action

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Before you invest the time and equipment, read this explainer to see whether mining is for you. We will focus primarily on Bitcoin. (Related: How Bitcoin Works and our useful infographic, What's Bitcoin)

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By mining, you can earn cryptocurrency without having to put down money to this. That said, you certainly don't need to be a miner to own crypto.   You can even purchase crypto using fiat currency (USD, EUR, JPY, etc); you can trade it click resources on an exchange like Bitstamp using other crypto (example: Using Ethereum or NEO to purchase Bitcoin); you even can earn it by playing video games or even by publishing blogposts on programs which pay its consumers in crypto.

In addition to lining the pockets of miners, mining serves a second and vital purpose: it's the only means to release new cryptocurrency into circulation. In other words, miners are basically"minting" currency. By way of instance, at the time of writing this piece, there were about 17 million Bitcoin in circulation.

In the absence of miners, Bitcoin would nevertheless exist and be usable, but there might never be any additional Bitcoin. There'll come a time when Bitcoin mining ends; per the Bitcoin Protocol, the number of Bitcoin will be capped at 21 million. (Related reading: What Happens Bitcoin After All 21 Million are Mined).

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Aside from the short-term Bitcoin payoff, being a miner can provide you"voting" power when changes are suggested in the Bitcoin protocol. In other words, a successful miner has influence on the decision-making process on these matters as  forking.

Bitcoin are mined in units known as"blocks." At the time of writing, the reward for completing a cube is 12.5 Bitcoin. At today's price of approximately $10,000 each Bitcoin, this means you'd earn (12.5 x 10,000)$125,000.

When Bitcoin was mined in 2009, mining one block could earn you 50 BTC. In 2012, this was halved to 25 BTC. In 2016, this was halved to the current degree of 12.5 BTC. In 2020 or so, the anonymous reward size will be halved again to 6.25 BTC.

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If you want to keep track of precisely when these halvings will occur, then you can consult with the Bitcoin Clock, which upgrades this information in real time.

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Miners are getting paid for their work as auditors. They're doing the work of verifying previous Bitcoin transactions. This convention is meant to maintain Bitcoin users honest, and has been conceived by Bitcoin's founder, Satoshi Nakamoto. By verifying transactions, miners are helping to prevent the"double-spending issue."