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If you want to join in the bitcoin frenzy with no simply buying the digital currency at today's inflated prices, then bitcoin mining is another way to get involved. But, mining bitcoins does come with expenses -- and dangers -- of its own. And the more popular bitcoins become, the harder it is to mine profitably. .

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

Bitcoin transactions are secured by blockchains, which compose a public ledger of transactions. Because of the way blockchain transactions are structured, they're extremely tough to alter or undermine, even by the top hackers. But in order to protect those transactions, someone needs to dedicate computing power to verifying the activity and packaging the facts in a block that goes into the bitcoin ledger.

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As a reward for doing the job to track and secure transactions, miners earn bitcoins for each block that they effectively procedure. .

The bitcoin founders have put a limit of 21 million bitcoins available for mining. Once that total is reached, miners will still 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, approximately 16.8 million of those 21 million bitcoins have already been mined.  Assuming that the bitcoin mining industry doesn't change radically, it seems like we won't reach on the 21 million-bitcoin limit until the year 2140. .

During the early 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's no longer sensible, because solving bitcoin transactions is becoming too hard for your average 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 people have been bitcoin mining at any given time, then the network will be generous and discuss bitcoins readily in order to attain the predetermined number. However, now this bitcoin mining has become so widespread, the network is now much stingier about handing out bitcoins to miners.

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

To get started with your own mining rig, you buy hardware designed for mining bitcoin (or any other digital 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 utilize a bitcoin mining rig, actually making money on the process is something of a challenge. Because more and more people are signing up for mine bitcoins, the mining procedure continues to have more difficult and will likely keep doing this for a while.

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

If buying and maintaining your own mining gear doesn't attract you, then cloud mining may be the best way to go. Cloud mining companies invest in huge mining channels, often filling entire information centers together with all the hardware, and then sell 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 which sell thousands of multiyear subscriptions, pay out for a couple of months, and then disappear into the sunset. In case you decide to try out cloud mining, do your homework anchor in advance and confirm that the company you're dealing with is a true cloud miner and not a scheme.

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