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

Unlike paper currency, that can be printed by governments and issued by banks, bitcoins do not come in any physical type. That makes a significant risk, as hackers could theoretically produce bitcoins from nothing. Bitcoin mining is the way the bitcoin network retains its transactions protected.

Bitcoin transactions are secured with blockchains, which compose a public ledger of transactions. Because of how blockchain transactions are structured, they're extremely tough to alter or compromise, even from the best hackers. But in order to protect these transactions, someone needs to dedicate computing power to verifying the action and packaging the facts in a block which goes into the bitcoin ledger.

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As a reward for doing the work to track and secure transactions, miners earn bitcoins for every block they effectively process. .

The bitcoin founders have set a limit of 21 million bitcoins available for mining. Once that amount is reached, miners will continue to have the ability to benefit from transaction fees, however they won't be granted bitcoins as a reward for their job. As of mid-January 2018, approximately 16.8 million of those 21 million bitcoins have been mined.  Assuming the bitcoin mining industry doesn't change radically, it seems like we won't reach on the 21 million-bitcoin restrict until the year 2140. .

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

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

Nowadays, in order to have a chance in being profitable, miners need to adopt one of two approaches: 1) buy technical hardware (aka a bitcoin mining rig) or 2) join a cloud mining pool. .

To begin with your own mining rig, you purchase hardware designed for mining bitcoin (or some other virtual currency), set it up, and let it run 24/7 solving bitcoin transactions. Ideally, this will result in a continuous stream of payments with no needing to get involved.

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While it's fairly easy to establish and use a bitcoin mining rig, actually making money on the course of action is something of a challenge. Because more and more people are signing up for mine bitcoins, the mining procedure continues to get more difficult and will probably keep doing so for a while.

And because bitcoin mining rigs aren't cheap -- expect to pay at least $1,000 for the hardware, or even 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 rigs consume enormous amounts of electricity, which means you also need to subtract expense in the bitcoins you earn to determine your profits. .

If buying and maintaining your own mining hardware doesn't attract you, then cloud mining might be the best way to go. Cloud mining companies invest in enormous mining channels, often filling entire information centers with the hardware, and then market subscriptions to individuals interested in dipping a toe into bitcoin mining.

The largest challenge facing cloud mining readers is avoiding fraud. The field is rife with pseudo-companies that sell thousands of multiyear subscriptions, pay out for a few months, and then vanish into the sunset. In case you choose to try out cloud mining, do your homework in advance and confirm that the company you're dealing with is a real cloud miner and not a scheme.

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