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Legitimate miners and buyers have to incur substantial production and energy costs, 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 cost for acquisition of bitcoins. They simply 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 absolutely free from regulation (for the moment), allows for completely anonymous ownership, and is both highly rewarding and nearly free to produce (if you are willing to break 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 would like 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 advice to law enforcement is easy: 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 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's an undeniably large correlation between bitcoin ownership and criminal action. Especially since bitcoins are becoming increasingly more profitable to criminal malware seeders and botnet operators while concurrently becoming less rewarding for traders that are valid.

Here is the key take-away: bitcoins are becoming the"national currency" of criminals the world over and are becoming an increasingly poor investment for legitimate miners.

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

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Well, before you invest time and equipment, read this explainer to see whether mining is really for you. We'll focus mostly 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 to it. Nevertheless, you certainly don't need to be a miner to own crypto.   You can also buy crypto using fiat currency (USD, EUR, JPY, etc); you can trade it 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 simply by publishing blogposts on programs that pay its consumers in crypto.

In addition to lining the pockets of miners, mining functions a second and vital purpose: It is the only way to discharge new cryptocurrency into circulation. In other words, miners are essentially"minting" currency. By way of example, as of the time of writing this bit, there were approximately 17 million Bitcoin in circulation.

In the absence of miners, Bitcoin would still 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 will likely be capped at 21 million. (Associated 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 give you"voting" power when changes are proposed in the Bitcoin protocol. In other words, an effective miner has influence on the decision-making procedure on such matters as  forking.

Bitcoin are mined in units called"cubes" At the time of writing, the reward for completing a block is 12.5 Bitcoin. At today's cost of approximately $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 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 tabs on precisely when these halvings will occur, 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 are doing the job of verifying previous 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 prevent the"double-spending problem."