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Legitimate miners and buyers need to incur substantial production and energy costs, 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 price, is free from regulation (for the moment), allows for completely anonymous ownership, and is both highly rewarding and nearly free to create (if you're willing to violate the law).

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There's no doubt that bitcoin has staying power, but whether that's only among criminals (and people who would like to traffic with them, like the Silk Road drug sellers and customers), or if 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 easy: follow the bitcoin. There is 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 have judicial permission to follow the footprints, do so.

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While bitcoin use is not limited to criminals, there is an undeniably high correlation between bitcoin ownership and criminal action. Notably since bitcoins are becoming every more profitable to criminal malware seeders and botnet operators while concurrently becoming less profitable 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 legitimate 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 forms 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 time and equipment, read this explainer to find out whether mining is really for you. We will focus primarily on Bitcoin. (Connected: 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 it. Nevertheless, you certainly don't need to become a miner to own crypto.   You can also purchase 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 buy Bitcoin); you even can earn it by playing video games or by publishing blogposts on platforms that cover its users in crypto.

In addition to lining the pockets of miners, mining serves a second and critical purpose: It is the only way to discharge new cryptocurrency into circulation. In other words, miners are essentially"minting" currency. For instance, as of 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 would never be any additional Bitcoin. There'll come a time when Bitcoin mining ends; per the Bitcoin Protocol, the number of Bitcoin is going to likely be capped at 21 million. (Related reading: What Happens Read Full Article 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 suggested in the Bitcoin protocol. In other words, an effective 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 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 would earn you 50 BTC. In 2012, this was halved to 25 BTC. In 2016, this was halved into the current level 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, then 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 work of verifying previous Bitcoin transactions. This convention is meant Read More Here to maintain Bitcoin users honest, and was conceived by Bitcoin's founder, Satoshi Nakamoto. By verifying transactions, miners are helping to prevent the"double-spending problem."