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Legitimate miners and buyers have 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 work to hapless victim machines all over the world. Criminal bitcoin thieves don't incur the exchange rate fee for acquisition of bitcoins. They just 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 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 break the law).

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

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My advice to law enforcement is simple: follow the bitcoin. There is no doubt that more and more criminals will be using bitcoin to generate gain as well as 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 usage is not confined to criminals, there is an undeniably high 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 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 valid miners.

Cryptocurrency mining is painstaking, expensive, and only sporadically rewarding. Nonetheless, mining includes a magnetic attraction for many investors interested in cryptocurrency. This might be because entrepreneurial types see mining as pennies from heaven, such as California gold prospectors in 1848. And If You're technologically inclined, why not do it

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Well, before you invest time and equipment, browse this explainer to find out whether mining is really for you. We will focus primarily on Bitcoin. (Related: 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 for it. That said, 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 on an exchange like Bitstamp using other crypto (example: Using Ethereum or NEO to purchase Bitcoin); you even can earn it by playing video games or by publishing blogposts on platforms which pay its users in crypto.

In addition to lining the pockets of miners, mining functions a second and vital purpose: It is 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 nevertheless 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 visit 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, an effective miner has influence on the decision-making procedure on such matters as  forking.

Bitcoin are mined in units called"blocks." 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, 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, click here to find out more the reward size will be halved again to 6.25 BTC.

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If you want to keep tabs on exactly when these halvings will occur, you can consult with 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 previous Bitcoin transactions. This convention is meant to maintain Bitcoin users honest, and was conceived by Bitcoin's founder, Satoshi Nakamoto. By verifying transactions, miners are helping to prevent the"double-spending problem."