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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 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 pockets from law-abiding owners.

What we've got here, then, is a commodity (I hesitate to call it a currency) with a current value, is free from regulation (for the moment), allows for completely anonymous ownership, and is both highly profitable and almost free to create (if you're willing to break the law).

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There's no doubt the bitcoin has staying power, but whether that is just among criminals (and people who wish to traffic together, like the Silk Road drug sellers and clients ), 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 profit in addition to pay their tracks. Whenever you see a stash of bitcoin and have judicial permission to follow the footprints, do this.

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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 ever less profitable for traders that are valid.

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 legitimate miners.

Cryptocurrency mining is painstaking, expensive, and only sporadically rewarding. Nonetheless, mining includes a magnetic draw 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 are technologically inclined, why not take action

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Before you invest the time and equipment, browse this explainer to see whether mining is for you. We will focus primarily on Bitcoin. (Connected: How Bitcoin Works and our useful 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 even buy crypto using fiat currency (USD, EUR, JPY, etc); you can exchange 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 which pay its consumers in crypto.

In addition to lining the pockets of miners, mining functions a second and vital purpose: it's 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 about 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; per the Bitcoin Protocol, the number of Bitcoin will likely be capped at 21 million. (Associated reading: What Happens continue reading this to Bitcoin After All 21 Million are Mined).

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Besides the short-term Bitcoin payoff, being a miner can give you"voting" electricity when changes are suggested in the Bitcoin protocol. In other words, a successful miner has influence on the decision-making procedure on such matters as  forking.

Bitcoin are mined in units called"blocks." As of the time of writing, the reward for completing a cube is 12.5 Bitcoin. At today's cost of approximately $10,000 per 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 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 track of exactly when these halvings will occur, 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 previous 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 to prevent the"double-spending issue."