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Legitimate miners and buyers have to incur substantial production and energy expenses, or have to pay the going exchange rates for bitcoins.

Criminal miners pay virtually nothing for its production of new coins, outsourcing the job to hapless victim machines all over the world. 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 free from regulation (for the moment), allows for completely anonymous ownership, and is both highly profitable and nearly free to create (if you are willing to break the law).

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There's no doubt the bitcoin has staying power, but whether that is just among criminals (and those who wish to traffic with them, 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 is no doubt that more and more criminals will be using bitcoin to generate profit as well as cover their tracks. Whenever you find 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's an undeniably large correlation between bitcoin ownership and criminal action. Notably since bitcoins are becoming increasingly more rewarding to criminal malware seeders and botnet operators while concurrently becoming less profitable for legitimate traders.

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 valid miners.

Cryptocurrency mining is painstaking, expensive, and only sporadically rewarding. Nonetheless, mining includes a magnetic draw for many investors interested in cryptocurrency. This may be because entrepreneurial forms see view mining as pennies from heaven, like 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, read this explainer to find out whether mining is 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 to this. That said, you certainly don't need to become a miner to own crypto.   You can even purchase crypto using fiat currency (USD, EUR, JPY, etc); you can trade it on an exchange like Bitstamp using other crypto (instance: Using Ethereum or NEO to buy Bitcoin); you even can earn it by playing video games or even simply by publishing blogposts on programs which cover its consumers in crypto.

In addition to lining the pockets of miners, mining functions a second and critical purpose: it's the only means to discharge new cryptocurrency into circulation. In other words, miners his response are essentially"minting" currency. By way of example, at the time of writing this bit, there were approximately 17 million Bitcoin in circulation.

In the absence of miners, Bitcoin would nevertheless exist and be usable, but there might never be any additional Bitcoin. There'll come a time when Bitcoin mining ends; each the Bitcoin Protocol, the number of Bitcoin will likely be capped at 21 million. (Associated reading: What Happens Bitcoin After All 21 Million are Mined).

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Aside from the short-term Bitcoin payoff, being a miner can provide you"voting" power when changes are suggested in the Bitcoin protocol. In other words, a successful miner has influence on the decision-making procedure on such matters as  forking.

Bitcoin are mined in units known as"blocks." At this time of writing, the reward for completing a block is 12.5 Bitcoin. At today's cost of approximately $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 would earn you 50 BTC. In 2012, this was halved to 25 BTC. In 2016, this was halved to the current degree 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 tabs on exactly 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 keep Bitcoin users honest, and was conceived by Bitcoin's founder, Satoshi Nakamoto. By verifying transactions, miners are helping prevent the"double-spending problem."