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Legitimate miners and buyers need to incur substantial production and energy expenses, or have to pay the going exchange rates for bitcoins.
Criminal miners pay nearly nothing for the production of new coins, outsourcing the job to hapless victim machines all over the world. Criminal bitcoin thieves don't incur the exchange rate fee for acquisition of bitcoins. They just 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) with a current value, is free of regulation (for the moment), allows for completely anonymous ownership, and is both highly profitable and nearly free to produce (if you're willing to violate the law).
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There's no doubt that bitcoin has staying power, but if that's just among criminals (and those who wish to traffic together, like the Silk Road drug sellers and clients ), or whether it is going to become a valuable trading commodity for the rest of us is unclear.
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My advice to law enforcement is simple: follow the bitcoin. There is no doubt that more and more criminals will be using bitcoin to generate gain in addition to cover their tracks. Whenever you see a stash of bitcoin and possess judicial permission to follow the footprints, do this.
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While bitcoin use is not limited to criminals, there's an undeniably large correlation between bitcoin ownership and criminal action. Especially since bitcoins are becoming increasingly more rewarding 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"national currency" of criminals the world over and are becoming an increasingly inadequate investment for legitimate miners.
Cryptocurrency mining is painstaking, expensive, and only sporadically rewarding. Nonetheless, mining includes a magnetic draw for many investors interested in cryptocurrency. This might be because entrepreneurial types see mining as pennies from heaven, such as California gold prospectors in 1848. And if you are technologically inclined, why not do it
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Well, before you invest the time and equipment, browse this explainer to find out whether mining is for you. We'll focus mostly on Bitcoin. (Related: How Bitcoin Works and our useful infographic, What is Bitcoin)
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By mining, you can earn cryptocurrency without having to put down money for this. Nevertheless, you certainly don't need to be a miner to own crypto.  You can even buy crypto using fiat currency (USD, EUR, JPY, etc); you can trade it on an exchange like Bitstamp using other crypto (instance: Using Ethereum or NEO to purchase Bitcoin); you even can earn it by playing video games or even simply by publishing blogposts on platforms that pay its consumers in crypto.
In addition to lining the pockets of miners, mining functions a second and critical purpose: it's the only way to release new cryptocurrency into circulation. In other words, miners are basically"minting" currency. For example, at the time of writing this bit, there were about 17 million Bitcoin in circulation.
In the absence of miners, Bitcoin would nevertheless exist and be usable, but there would never be any additional Bitcoin. There will come a time when Bitcoin mining ends; per the Bitcoin Protocol, the number of Bitcoin will be capped at 21 million. (Associated reading:Â What Happens Bitcoin After All 21 index Million are Mined).
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Besides the short-term Bitcoin payoff, being a miner can provide you"voting" power when changes are proposed in the Bitcoin protocol. In other words, a successful miner has influence on the decision-making procedure on these matters as  forking.
Bitcoin are mined in units called"blocks." At this time of writing, the reward for completing a cube is 12.5 Bitcoin. At today's price of about $10,000 per Bitcoin, this means that 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 into the current degree of 12.5 BTC. In 2020 or so, the payoff size will be halved again to 6.25 BTC.
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If you want to keep track of exactly when these halvings will occur, you can consult the Bitcoin Clock, which upgrades this information in real time.
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Miners are getting paid for their work as auditors. They are doing the job of verifying preceding 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 prevent the"double-spending issue."