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Legitimate miners and buyers have 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 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 free from regulation (for the moment), allows for completely anonymous ownership, and is both highly rewarding and almost free to produce (if you are willing to violate the law).

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There is no doubt the bitcoin has staying power, but whether that's only among criminals (and people who wish to traffic together, such as the Silk Road medication sellers and customers), 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 profit as well as cover their tracks. Whenever you find a stash of bitcoin and possess 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 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 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 draw for many investors interested in cryptocurrency. This may be because entrepreneurial forms see mining as pennies from heaven, such as California gold prospectors in 1848. And if you are technologically inclined, why not take action

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

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

In addition to lining the pockets of miners, mining serves a second and vital purpose: it's the only means to discharge new cryptocurrency into circulation. In other words, miners are essentially"minting" currency. For 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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Aside from the short-term Bitcoin payoff, being a miner can give 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 these matters as  forking.

Bitcoin are mined in units known as"cubes" As of this time of writing, the reward for completing a cube is 12.5 Bitcoin. At today's price of approximately $10,000 per Bitcoin, this means 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 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 occur, you can consult the Bitcoin read 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 to prevent the"double-spending problem."