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Legitimate miners and buyers have to incur substantial production and energy expenses, or need 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 pockets from law-abiding owners.

What we've got here, then, is a commodity (I hesitate to call it a currency) with a current price, is absolutely free from regulation (for the moment), allows for completely anonymous ownership, and is both highly profitable and almost free to create (if you're willing to break the law).

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There's no doubt that bitcoin has staying power, but if that's only among criminals (and those who wish to traffic with them, like the Silk Road medication 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 information to law enforcement is simple: follow the bitcoin. There's no doubt that more and more criminals will be using bitcoin to generate profit as well as pay their tracks. Whenever you find 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 activity. Especially since bitcoins are becoming every more rewarding to criminal malware seeders and botnet operators while concurrently becoming less rewarding for legitimate traders.

Here is the key take-away: bitcoins are becoming the most"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 may be because entrepreneurial forms see mining as pennies from heaven, such as California gold prospectors in 1848. And If You're technologically inclined, why not do it

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Well, before you invest time and equipment, browse this explainer to find out whether mining is for you. We'll focus primarily on Bitcoin. (Connected: 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 it. Nevertheless, you certainly straight from the source don't have to become a miner to own crypto.   You can also buy crypto using fiat currency (USD, EUR, JPY, etc); you can trade it on an exchange such as Bitstamp using other crypto (example: Using Ethereum or NEO to purchase Bitcoin); you even can earn it by playing video games or by publishing blogposts on programs which pay its users in crypto.

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

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

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Besides the short-term Bitcoin payoff, being a miner can give 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 issues as  forking.

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

When Bitcoin was mined in 2009, mining one block would 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 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 happen, 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 job of verifying preceding Bitcoin transactions. This convention is meant to keep Bitcoin users honest, and has been conceived by Bitcoin's founder, Satoshi Nakamoto. By verifying transactions, miners are helping to prevent the"double-spending problem."