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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 virtually nothing for its production of new coins, outsourcing the work 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) that has a current value, is absolutely free of 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 is just among criminals (and those who wish to traffic together, like the Silk Road medication sellers and customers), or if it will 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 gain in addition to cover 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 confined to criminals, there's an undeniably high correlation between bitcoin ownership and criminal activity. Notably since bitcoins are becoming every more rewarding to criminal malware seeders and botnet operators while concurrently becoming less profitable for traders that are valid.

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 attraction for many investors interested in cryptocurrency. This might be because entrepreneurial types 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 the time and equipment, you could try these out browse this explainer to see whether mining is really for you. We'll focus mostly on Bitcoin. (Connected: How Bitcoin Works and our helpful infographic, What is Bitcoin)

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By mining, you can earn cryptocurrency without having to put down money to this. Nevertheless, you certainly 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 like Bitstamp using other crypto (example: Using Ethereum or NEO to purchase Bitcoin); you even can earn it by playing video games or even by publishing blogposts on platforms which pay its consumers in crypto.

In addition to lining the pockets of miners, mining serves a second and critical purpose: It is the only means to release new cryptocurrency into circulation. In other words, miners are essentially"minting" currency. For instance, at the time of writing this piece, there were approximately 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 likely be capped at 21 million. (Related reading: What Happens Bitcoin After All 21 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 process on such matters as  forking.

Bitcoin are mined in units called"cubes" 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 would earn you 50 BTC. In 2012, this was halved to 25 BTC. In 2016, this was halved to the current level 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 exactly when these halvings will occur, you can consult 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 preceding Bitcoin transactions. This convention is meant to maintain Bitcoin users honest, and was conceived by Bitcoin's founder, Satoshi Nakamoto. By verifying transactions, miners are helping prevent the"double-spending issue."