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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 nearly nothing for its production of new coins, outsourcing the job to hapless victim machines the world over. 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 value, is free of regulation (for the moment), allows for completely anonymous ownership, and is both highly rewarding and nearly free to create (if you are willing to break the law).

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There is no doubt the bitcoin has staying power, but if that's just among criminals (and people who wish to traffic with them, such as 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 information to law enforcement is simple: follow the bitcoin. There's no doubt that more and more criminals will be using bitcoin to generate gain in addition to pay 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 usage is not limited to criminals, there is an undeniably large correlation between bitcoin ownership and criminal activity. Especially since bitcoins are becoming increasingly more rewarding to criminal malware seeders and botnet operators while concurrently becoming less rewarding for legitimate traders.

Here's 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 do it

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Before you invest time and equipment, read this explainer to find out whether mining is really for you. We will focus mostly on Bitcoin. (Connected: How Bitcoin Works and our helpful infographic, What's Bitcoin)

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By mining, you can earn cryptocurrency without having to put down money for it. Nevertheless, you certainly don't need to become a miner to own crypto.   You can also buy crypto using fiat currency (USD, EUR, JPY, etc); you can exchange it on an exchange such as Bitstamp using other crypto (example: Using Ethereum or NEO to buy Bitcoin); you even can earn it by playing video games or simply by publishing blogposts on platforms which pay its users in crypto.

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

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

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Besides the short-term Bitcoin payoff, being a miner can provide you"voting" electricity when changes are proposed in the Bitcoin protocol. In other words, a successful miner has influence on the decision-making process on these issues as  forking.

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

When Bitcoin was first mined in 2009, mining one block Continued would 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 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, then you can consult with the Bitcoin Clock, which updates 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 maintain Bitcoin users honest, and has been conceived by Bitcoin's founder, Satoshi Nakamoto. By verifying transactions, miners are helping prevent the"double-spending problem."