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Legitimate miners and buyers need to incur substantial production and energy expenses, 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 all over the world. Criminal bitcoin thieves don't incur the exchange rate cost 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 free of regulation (for the moment), allows for completely anonymous ownership, and is both highly rewarding and nearly free to create (if you're willing to break the law).

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

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My information to law enforcement is simple: 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 find a stash of bitcoin and have 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 action. Notably since bitcoins are becoming increasingly more rewarding to criminal malware seeders and botnet operators while concurrently becoming less rewarding for legitimate traders.

Here is the vital take-away: bitcoins are becoming the most"national currency" of criminals the world over and are becoming an increasingly poor investment for legitimate miners.

Cryptocurrency mining is painstaking, expensive, and only sporadically rewarding. Nonetheless, mining has a magnetic draw 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 take action

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Well, before you invest time and equipment, browse this explainer to see whether mining is really for you. We will focus primarily on Bitcoin. (Connected: How Bitcoin Works and our helpful infographic, What's Bitcoin)

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By mining, you can earn cryptocurrency without having to put down money to it. That said, you certainly don't need to become a miner to own crypto.   You can even buy 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 even simply by publishing blogposts on platforms that cover its consumers in crypto.

In addition to lining the pockets of miners, mining serves a second and critical purpose: It is the only way to release new cryptocurrency into circulation. In other words, miners are basically"minting" currency. For example, as of the time of writing this piece, there were about 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 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 give you"voting" power when changes are suggested in the Bitcoin protocol. In other words, a successful miner has influence on the decision-making process on these matters as  forking.

Bitcoin are mined in units known as"blocks." As of the 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 that 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, the reward size will be halved again to 6.25 BTC.

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If you want to keep track of exactly when these halvings will happen, then 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 Full Report 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."