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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 job 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 pockets 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 absolutely free of regulation (for the moment), allows for completely anonymous ownership, and is both highly rewarding and almost free to create (if you are willing to violate the law).

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

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My advice to law enforcement is easy: follow the bitcoin. There is no doubt that more and more criminals will be using bitcoin to generate gain in addition to pay their tracks. Whenever you see a stash of bitcoin and possess judicial permission to follow the footprints, do this.

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While bitcoin use is not limited to criminals, there is an undeniably high correlation between bitcoin ownership and criminal activity. Notably since bitcoins are becoming increasingly 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"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 includes a magnetic attraction for many investors interested in cryptocurrency. This may be because entrepreneurial types see mining as pennies from heaven, such as California gold prospectors in 1848. And if you are technologically inclined, why not do it

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Well, before you invest 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. Nevertheless, you certainly don't have to be a miner to own crypto.   You can even purchase crypto using fiat currency (USD, EUR, JPY, etc); you can trade it on an exchange such as Bitstamp using other crypto (example: Using Ethereum or NEO to purchase 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 is the only way to release new cryptocurrency into more information circulation. In other words, miners are basically"minting" currency. By way of instance, as of the time of writing this piece, 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'll come a time when Bitcoin mining ends; per the Bitcoin Protocol, the number of Bitcoin is going to likely be capped at 21 million. (Related reading: What Happens 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 proposed in the Bitcoin protocol. In other words, a successful moved here miner has influence on the decision-making process on these matters as  forking.

Bitcoin are mined in units called"blocks." As of this time of writing, the reward for completing a cube is 12.5 Bitcoin. At today's cost of approximately $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 into the current degree 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 updates 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 preceding 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 prevent the"double-spending issue."