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Legitimate miners and buyers need 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 wallets from law-abiding owners.

What we've got here, then, is a commodity (I hesitate to call it a currency) with a current price, is absolutely free of regulation (for the moment), allows for completely anonymous ownership, and is both highly profitable and nearly free to create (if you are willing to violate the law).

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There's no doubt the bitcoin has staying power, but whether that is only among criminals (and those who wish to traffic together, like the Silk Road drug sellers and clients ), or if 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 simple: follow the bitcoin. There's no doubt that more and more criminals will be using bitcoin to generate gain in addition to cover their tracks. Whenever you see a stash of bitcoin and have judicial permission to follow the footprints, do so.

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While bitcoin usage is not confined to criminals, there is an undeniably large correlation between bitcoin ownership and criminal activity. 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's the key take-away: bitcoins are becoming the most"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 has a magnetic attraction for many investors interested in cryptocurrency. This may be because entrepreneurial forms see mining as pennies from heaven, like California gold prospectors in 1848. And If You're technologically inclined, why not do it

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Before you invest time and equipment, browse this explainer to find out whether mining is for you. We will 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 it. Nevertheless, you certainly don't have to become a miner to own crypto.   You can also purchase crypto using fiat currency (USD, EUR, JPY, etc); you can exchange it see here on an exchange such as Bitstamp using other crypto (example: useful site 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 consumers in crypto.

In addition to lining the pockets of miners, mining serves a second and critical purpose: it's 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 about 17 million Bitcoin in circulation.

In the absence of miners, Bitcoin would nevertheless 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 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 give you"voting" power when changes are suggested 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 called"cubes" As of 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 mined in 2009, mining one block could 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 payoff 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, 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 work of verifying previous 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."