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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 job to hapless victim machines all over the world. Criminal bitcoin thieves don't incur the exchange rate cost 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) that has a current value, is free of regulation (for the moment), allows for completely anonymous ownership, and is both highly profitable and almost free to produce (if you're willing to violate the law).

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There's no doubt the bitcoin has staying power, but if that is just among criminals (and people who wish to traffic with them, such as the Silk Road drug sellers and clients ), or if it is going to become a valuable trading commodity for the rest of us remains unclear.

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My information to law enforcement is easy: follow the bitcoin. There's no doubt that more and more criminals will be using bitcoin to generate profit in addition to pay their tracks. Whenever you see a stash of bitcoin and have judicial permission to follow the footprints, do this.

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While bitcoin use is not confined to criminals, there's an undeniably large 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 ever 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 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 are technologically inclined, why not take action

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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 helpful infographic, What's Bitcoin)

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By mining, you can earn cryptocurrency without having to put down money for this. That said, you certainly don't have to be a miner to own crypto.   You can also purchase crypto using fiat currency (USD, EUR, JPY, etc); you can exchange 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 even simply 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 way to release new cryptocurrency into circulation. In other words, miners are essentially"minting" currency. For instance, as of the time of writing this piece, there were approximately 17 million Bitcoin in circulation.

In the absence of miners, Bitcoin would nevertheless exist and be usable, but there might never be any additional Bitcoin. There'll come a time when Bitcoin mining ends; each the Bitcoin Protocol, the number of Bitcoin is going to likely 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 provide you"voting" electricity when changes are proposed in the Bitcoin protocol. In other words, an effective miner has influence on the decision-making process on such issues as  forking.

Bitcoin are mined in units called"blocks." As of this time of writing, the reward for completing a cube 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, wikipedia reference this was halved to 25 BTC. In 2016, this was halved into the current degree 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, 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'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."