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If you want to join in the bitcoin frenzy without simply buying the digital currency in today's inflated prices, then bitcoin mining is another way to get involved. But, mining bitcoins will include expenses -- and dangers -- of its own. And the more popular bitcoins become, the harder it would be to mine them profitably. .

Unlike paper currency, which is printed by both governments and issued by banks, bitcoins do not arrive in any physical type. That creates a significant hazard, as hackers can theoretically produce bitcoins from nothing. Bitcoin mining is how the bitcoin network retains its transactions protected.

Bitcoin transactions are secured by blockchains, which compose a public ledger of transactions. Due to the way blockchain transactions are structured, they're extremely difficult to alter or compromise, even by the best hackers. But in order to secure these transactions, someone needs to dedicate computing power to verifying the action and packaging the details in a block which goes into the bitcoin ledger.

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As a reward for doing the job to monitor and secure transactions, miners earn bitcoins for every block that they successfully procedure. .

The bitcoin founders have set a limit of 21 million bitcoins available for mining. Once that total is reached, miners will continue to be able to benefit from transaction fees, but they won't be granted bitcoins as a reward for their work. As of mid-January 2018, roughly 16.8 million of those 21 million bitcoins have been mined.  Assuming the bitcoin mining industry doesn't change radically, it looks like we won't hit on the 21 million-bitcoin limit until the year 2140. .

During the first days of bitcoin mining, miners would often download a software package designed to allow their computers to process bitcoin transactions in the background. Unfortunately, that is no longer practical, because solving bitcoin transactions is becoming too difficult for your computer to manage.

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The bitcoin network is designed to make a certain number of new bitcoins every 10 minutes. If only a couple men and women are bitcoin mining at any given time, then the network will be generous and share bitcoins easily in order to reach the predetermined number. But now this bitcoin mining has become so widespread, the network has become much stingier about handing out bitcoins into miners.

Nowadays, in order to have a chance at being rewarding, miners need to adopt one of two strategies: 1) purchase specialized hardware (aka a bitcoin mining rig) or 2) join a cloud mining pool. .

To begin with your own mining rig, you buy hardware designed for mining bitcoin (or any other virtual currency), set it up, and let it run 24/7 solving bitcoin transactions. Ideally, this will result in a steady stream of payments without your needing to get involved.

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As soon as it's fairly easy to establish and utilize a bitcoin mining rig, really making money on the course of action is something of a challenge. Since more and more people are signing up to mine bitcoins, the mining process continues to get more difficult and will likely keep doing this for some time.

And because bitcoin mining rigs aren't cheap -- expect to pay at least $1,000 for the hardware, or several times that for a top-quality rig -- having to replace it every year or 2 takes a massive bite out of any profits you earn from mining. Plus, most mining channels consume enormous amounts of electricity, so you also have to subtract expense in the bitcoins you earn to determine your own profits. .

If buying and maintaining your own mining hardware doesn't appeal to you, then cloud mining may be the way to go. Cloud mining companies invest in huge mining rigs, often filling entire information centers together with all the hardware, and then sell subscriptions to individuals interested in dipping a toe into bitcoin go now mining.

The biggest challenge facing cloud mining readers is avoiding fraud. The area is rife with pseudo-companies which sell thousands of multiyear subscriptions, cover for a few months, and then disappear into the sunset. If you decide to try cloud mining, do your homework in advance and confirm that the company you're dealing with is a real cloud miner and not a strategy.

Avoid companies with anonymous domain registration (you can look up their registration info at Network Solutions), in addition to any mining company that"guarantees" profits or offers enormous incentives for referring new customers; anything over a 10% referral commission is deeply suspicious, because legitimate mining pools just don't generate a large enough profit margin to pay big commissions. .