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

Criminal miners pay virtually nothing for the 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 absolutely free of regulation (for the moment), allows for completely anonymous ownership, and is both highly rewarding and almost free to produce (if you are willing to violate the law).

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There's no doubt the bitcoin has staying power, but if that is just among criminals (and people who would like to traffic with them, such as the Silk Road drug sellers and customers), or whether it will become a valuable trading commodity for the rest of us remains unclear.

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My advice to law enforcement is easy: follow the bitcoin. There is no doubt that more and more criminals will be using bitcoin to generate gain as well as pay their tracks. Whenever you see 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 activity. 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 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 types 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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Well, before you invest the time and equipment, read this explainer to see 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 it. Nevertheless, you certainly don't have to be a miner to own crypto.   You can also buy crypto using fiat currency (USD, EUR, JPY, etc); you can exchange it on an exchange such as Bitstamp using other crypto (example: Using Ethereum or NEO to buy Bitcoin); you even can earn it by playing video games or simply by publishing blogposts on programs that cover its consumers in crypto.

In addition to lining the pockets of miners, mining serves a second and vital purpose: It is the only way to discharge new cryptocurrency into circulation. In other words, miners are essentially"minting" currency. By way of example, as of the time of writing this piece, there were approximately 17 million Bitcoin in circulation.

In the absence of miners, Bitcoin would still exist and wikipedia reference 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 to 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, an effective miner has influence on the decision-making process on these issues as  forking.

Bitcoin are mined in units called"cubes" At the 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 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 into the current level 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 track of precisely when these halvings will occur, 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 previous Bitcoin transactions. This convention is check these guys out meant to maintain Bitcoin users honest, and has been conceived by Bitcoin's founder, Satoshi Nakamoto. By verifying transactions, miners are helping prevent the"double-spending issue."