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

Unlike paper currency, that is printed by governments and issued by banks, bitcoins do not arrive in any physical form. That makes a significant hazard, as hackers could theoretically produce bitcoins from nothing. Bitcoin mining is how the bitcoin network keeps its transactions secure.

Bitcoin transactions are secured by blockchains, which make up a public ledger of transactions. Because of how blockchain transactions are structured, they're extremely difficult to alter or undermine, even from the top hackers. However, in order to protect those transactions, someone needs to dedicate computing power to verifying the action and packaging the facts in a block that goes into the bitcoin ledger.

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As a reward for doing the work to monitor and secure transactions, miners earn bitcoins for each block they successfully process. .

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

During the early 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 is no longer sensible, because solving bitcoin transactions has become too hard for your computer to manage.

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The bitcoin network is designed to produce a certain number of new bitcoins each 10 minutes. If only a few people are bitcoin mining at any given time, then the network will be generous and share 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.

Nowadays, in order to have a chance in being profitable, 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 get started 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 dig this result in a steady flow of payments without your needing to get involved.

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As soon as it's fairly simple to set up and utilize a bitcoin mining rig, actually making money on the process is something of a challenge. Since more and more people are signing up to mine bitcoins, the mining process continues to have more difficult and will likely keep doing so for some time.

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

When buying and maintaining your own mining gear doesn't appeal to 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 sell subscriptions to individuals interested in dipping a toe into bitcoin mining.

The biggest challenge this content facing cloud mining subscribers is avoiding fraud. The area is rife with pseudo-companies which sell thousands of multiyear subscriptions, cover for a couple of months, and then disappear into the sunset. In case you choose to try out cloud mining, do your homework in advance and confirm sites 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 Network Solutions), as well as any mining company that"guarantees" profits or provides huge incentives for referring new clients; anything over a 10% referral commission is profoundly suspicious, because legitimate mining pools simply don't generate a high enough profit margin to pay big commissions. .