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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 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 wallets 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 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 the bitcoin has staying power, but whether that is just among criminals (and those who wish to traffic with them, like the Silk Road medication sellers and customers), or whether 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 is no doubt that more and more criminals will be using bitcoin to generate gain 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 usage is not confined to criminals, there is an undeniably high correlation between bitcoin ownership and criminal activity. Especially since bitcoins are becoming every more rewarding 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 most"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 has a magnetic draw for many investors interested in cryptocurrency. This might be because entrepreneurial forms 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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Before you invest the time and equipment, read this explainer to see whether mining is really for you. We will focus mostly on Bitcoin. (Related: 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 to it. Nevertheless, you certainly don't have to be a miner to own crypto.   You can even buy crypto using fiat currency (USD, EUR, JPY, etc); you can exchange it on an exchange such as Bitstamp using other crypto (instance: Using Ethereum or NEO to buy Bitcoin); you even can earn it by playing video games or simply by publishing blogposts on platforms which 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 basically"minting" currency. For instance, at the time of writing this bit, 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 will come a time when Bitcoin mining ends; per the Bitcoin Protocol, the number of Bitcoin is going to 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 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 known as"cubes" At this 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 you'd earn (12.5 x 10,000)$125,000.

When Bitcoin was first mined in 2009, read here 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 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 happen, then 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 work of verifying preceding Bitcoin transactions. This convention is meant to maintain Bitcoin users honest, and has been conceived by Bitcoin's founder, Satoshi Nakamoto. By verifying transactions, miners are helping prevent the"double-spending problem."