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

Criminal miners pay virtually nothing for the 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 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) that has a current value, is free from regulation (for the moment), allows for completely anonymous ownership, and is both highly rewarding and nearly free to produce (if you are willing to break the law).

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There's no doubt the bitcoin has staying power, but if that is only among criminals (and people who would like to traffic with them, like the Silk Road drug sellers and clients ), or if it will 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 in addition to pay 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 use is not confined to criminals, there is an undeniably large correlation between bitcoin ownership and criminal activity. Notably since bitcoins are becoming every more profitable to criminal malware seeders and botnet operators while concurrently becoming ever less rewarding for legitimate traders.

Here is the key take-away: bitcoins are becoming the"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 includes a magnetic attraction for many investors interested in cryptocurrency. This might be because entrepreneurial types see mining as pennies from heaven, like California gold prospectors in 1848. And If You're technologically inclined, why not take action

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Before you invest the time and equipment, browse 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'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 be a miner to own crypto.   You can also purchase crypto using fiat currency (USD, EUR, JPY, etc); you can exchange it on an exchange such as Bitstamp using other crypto (instance: Using Ethereum or NEO to buy Bitcoin); you even can earn it by playing video games or simply by publishing blogposts on programs that pay its consumers in crypto.

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

In the absence of miners, Bitcoin would still exist and be usable, but there might never be any additional Bitcoin. There'll come a time when Bitcoin mining ends; per the Bitcoin Protocol, the number of Bitcoin is going to 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" electricity when changes are proposed in the Bitcoin protocol. In other words, an effective miner has influence on the decision-making process on such issues as  forking.

Bitcoin are mined in units called"blocks." As of this time of writing, the reward for completing a cube 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 to 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 tabs on precisely when these halvings will happen, 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 are doing the work of verifying previous important source Bitcoin transactions. This convention is meant to keep Bitcoin users honest, and has been conceived by Bitcoin's founder, Satoshi Nakamoto. By verifying transactions, miners are helping to prevent the"double-spending problem."