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Legitimate miners and buyers have to incur substantial production and energy costs, 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 the world over. Criminal bitcoin thieves don't incur the exchange rate fee 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 price, is absolutely free from regulation (for the moment), allows for completely anonymous ownership, and is both highly profitable and nearly free to create (if you're willing to violate the law).

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There's no doubt that bitcoin has staying power, but whether that's just among criminals (and those who would like to traffic with them, like the Silk Road medication 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 information to law enforcement is simple: follow the bitcoin. There's 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 so.

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While bitcoin use is not limited 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 profitable 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 poor investment for valid 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 are technologically inclined, why not take action

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Well, before you invest the time and equipment, browse this explainer to see whether mining is really for you. We'll focus primarily on Bitcoin. (Connected: How Bitcoin Works and our useful infographic, What is 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 need to be 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 Home Page games or by publishing blogposts on programs 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 way to discharge new cryptocurrency into circulation. In other words, miners are essentially"minting" currency. By way of instance, at the time of writing this bit, there were about 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 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 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" electricity when changes are proposed 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 called"cubes" At the time of writing, the reward for completing a block is 12.5 Bitcoin. At today's price of directory about $10,000 each 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 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, 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 issue."