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Legitimate miners and buyers need to incur substantial production and energy costs, or have 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 fee for acquisition of bitcoins. They simply 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) that has a current value, is absolutely free from regulation (for the moment), allows for completely anonymous ownership, and is both highly rewarding and nearly free to produce (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 customers), or whether it is going to become a valuable trading commodity for the rest of us is unclear.

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My information to law enforcement is simple: follow the bitcoin. There's no doubt that more and more criminals will be using bitcoin to generate gain as well as pay their tracks. Whenever you find a stash of bitcoin and possess judicial permission to follow the footprints, do so.

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While bitcoin usage is not confined to criminals, there is an undeniably high correlation between bitcoin ownership and criminal action. Especially since bitcoins are becoming increasingly more rewarding to criminal malware seeders and botnet operators while concurrently becoming less profitable 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 valid miners.

Cryptocurrency mining is painstaking, expensive, and only sporadically rewarding. Nonetheless, mining has a magnetic attraction for many investors interested in cryptocurrency. This might be because entrepreneurial forms 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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Before you invest time and equipment, read this explainer to find out whether mining is really for you. We will focus mostly on Bitcoin. (Related: 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 for it. That said, you certainly don't need to be a miner to own crypto.   You can also buy crypto using fiat currency (USD, EUR, JPY, company website etc); you can trade it on an exchange like Bitstamp using other crypto (example: Using Ethereum or NEO to buy Bitcoin); you even can earn it by playing video games or by publishing blogposts on platforms which cover its users 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 essentially"minting" currency. By way of instance, at the time of writing this piece, 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 will come a time when Bitcoin mining ends; each the Bitcoin Protocol, the number of Bitcoin is going to likely be capped at 21 million. (Associated reading: What Happens to 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, an effective miner has influence on the decision-making procedure on such issues as  forking.

Bitcoin are mined in units called"cubes" 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 into 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 precisely when these halvings will happen, then 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 to prevent the"double-spending problem."