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If you want to join in the bitcoin frenzy without simply buying the digital currency at the inflated prices, then bitcoin mining is another way to become involved. But, mining bitcoins does include expenses -- and dangers -- of its own. And also the more popular bitcoins become, the more difficult it would be to mine profitably. .

Unlike paper currency, that can be printed by governments and issued by banks, bitcoins do not come in any physical form. This creates a major hazard, as hackers can theoretically produce bitcoins from nothing. Bitcoin mining is the way the bitcoin network retains its transactions protected.

Bitcoin transactions are secured by blockchains, which compose a public ledger of transactions. Due to the way blockchain transactions are structured, they are extremely difficult to alter or undermine, even from the top hackers. But in order to secure those transactions, someone needs to dedicate computing power to verifying the activity and packaging the facts in a block that goes into the bitcoin ledger.

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As a reward for doing the work to monitor and secure transactions, miners earn bitcoins for each block they effectively procedure. .

The bitcoin founders have set a limit of 21 million bitcoins offered for mining. Once that amount is reached, miners will continue to have the ability to benefit from transaction fees, but they won't be granted bitcoins as a reward for their work. As of mid-January 2018, approximately 16.8 million of the 21 million bitcoins have been mined.  Assuming that the bitcoin mining industry doesn't change radically, it looks like we won't hit on the 21 million-bitcoin restrict until the year 2140. .

During the first days of bitcoin mining, miners would often download a software package designed to allow their computers to process bitcoin transactions in the background. Unfortunately, that's no longer practical, because solving bitcoin transactions has become too hard for your computer to manage.

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The bitcoin network is designed to produce a certain number of new bitcoins each 10 minutes. If only a few men and women are bitcoin mining at any given time, then the network will probably be generous and share bitcoins readily in order to attain the predetermined number. But now this bitcoin mining has become so widespread, the network is now much stingier about handing out bitcoins to miners.

These days, in order to have a chance at being rewarding, miners need to adopt one of two strategies: 1) purchase technical hardware (aka a bitcoin mining rig) or 2) join a cloud mining pool. .

To get started with your own mining rig, you purchase hardware designed for mining bitcoin (or any other digital currency), set it up, and let it run 24/7 solving bitcoin transactions. Ideally, this will result in a continuous stream of payments with no needing to get involved.

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While it's fairly easy to establish and use a bitcoin mining rig, actually making money on the process is something of a challenge. Since more and more people are signing up for mine bitcoins, the mining procedure continues to get more difficult and will likely keep doing this for a while.

And because bitcoin mining rigs aren't cheap -- expect to pay at least $1,000 for the hardware, or even several times that for a top-quality rig -- having to replace it every year or 2 takes a massive bite out of any gains you earn from mining. Plus, most mining rigs consume enormous amounts of electricity, which means you also need to subtract that expense in the bitcoins you earn to determine your own profits. .

If buying and maintaining your own mining gear doesn't appeal to you, then cloud mining may be the way to useful reference go. Cloud mining companies invest in enormous mining rigs, often filling entire information centers with the hardware, and then market subscriptions to individuals interested in dipping a toe into bitcoin mining.

The biggest challenge facing cloud mining subscribers is avoiding fraud. The area is rife with pseudo-companies which sell thousands of multiyear subscriptions, pay out for a few months, and then vanish into the sunset. If you decide to try out cloud mining, do your homework in advance and confirm that the company you're dealing with is a true cloud miner and not a strategy.

Avoid companies with anonymous domain registration (you can look up their registration info Network Solutions), in addition to any mining company that"guarantees" profits or provides huge incentives for referring new clients; anything above a 10% referral commission is profoundly suspicious, because valid mining pools simply don't generate a large enough profit margin to pay big commissions. .