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Legitimate miners and buyers need 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 work to hapless victim machines all over the world. Criminal bitcoin thieves don't incur the exchange rate cost 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 free of regulation (for the moment), allows for completely anonymous ownership, and is both highly profitable and almost free to create (if you're willing to violate the law).

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There's no doubt that bitcoin has staying power, but if that's just among criminals (and people who would like to traffic together, such as 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 advice to law enforcement is simple: follow the bitcoin. There's no doubt that more and more criminals will be using bitcoin to generate gain in addition to cover 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's an undeniably large correlation between bitcoin ownership and criminal action. Notably since bitcoins are becoming every more profitable to criminal malware seeders and botnet operators while concurrently becoming ever 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 has a magnetic draw for many investors interested in cryptocurrency. This may be because entrepreneurial forms 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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Before you invest time and equipment, read this explainer to find out whether mining is really for you. We'll focus mostly 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 it. Nevertheless, you certainly don't have 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 (example: Using Ethereum or NEO to buy Bitcoin); you even can earn it by playing video games or even by publishing blogposts on platforms that cover its consumers in crypto.

In addition to lining the pockets of miners, mining functions a second and vital purpose: It is the only means to release new cryptocurrency into circulation. In other words, miners are basically"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 would never be any additional Bitcoin. There will come a time when Bitcoin mining ends; each the Bitcoin Protocol, the number of Bitcoin will 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 provide 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 matters as  forking.

Bitcoin are mined in units called"blocks." At the time of writing, the reward for completing a cube is 12.5 Bitcoin. At today's price of approximately $10,000 each Bitcoin, this means that you'd earn (12.5 x 10,000)$125,000.

When Bitcoin was first my latest blog post 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 payoff 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, then you can consult with 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."