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Legitimate miners and buyers have to incur substantial production and energy costs, or need to pay the going exchange rates for bitcoins.

Criminal miners pay virtually nothing for the production of new coins, outsourcing the job 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 wallets 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 of 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 is no doubt the bitcoin has staying power, but if that is just among criminals (and people who wish to traffic together, such as the Silk Road drug sellers and clients ), or if it will become a valuable trading commodity for the rest of us remains unclear.

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My advice to law enforcement is simple: follow the bitcoin. There is no doubt that more and more criminals will be using bitcoin to generate gain in addition to cover their tracks. Whenever you find a stash of bitcoin and have judicial permission to follow the footprints, do this.

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While bitcoin use is not limited to criminals, there is an undeniably large correlation between bitcoin ownership and criminal action. Especially since bitcoins are becoming increasingly more rewarding to criminal malware seeders and botnet operators while concurrently becoming ever less rewarding for legitimate traders.

Here's the key take-away: bitcoins are becoming the"national currency" of criminals the world over and are becoming an increasingly inadequate investment for valid miners.

Cryptocurrency mining is painstaking, expensive, and only sporadically rewarding. Nonetheless, mining includes a magnetic attraction for many investors interested in cryptocurrency. This may be because entrepreneurial types see mining as pennies from heaven, like California gold prospectors in 1848. And If You're technologically inclined, why not do it

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Well, before you invest time and equipment, read this explainer to find out whether mining is for you. We will focus primarily on Bitcoin. (Related: you could look here How Bitcoin Works and our helpful infographic, What is 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 have to become a miner to own crypto.   You can also purchase crypto using fiat currency (USD, EUR, JPY, etc); you can trade it on an exchange like Bitstamp using other crypto (example: Using Ethereum or NEO to purchase Bitcoin); you even can earn it by playing video games or even simply by publishing blogposts on programs which cover its users in crypto.

In addition to lining the pockets of miners, mining functions a second and critical purpose: It is the only means to discharge new cryptocurrency into circulation. In other words, miners are essentially"minting" currency. By way of example, as of the time of writing this bit, there were about 17 million Bitcoin in circulation.

In the absence of miners, Bitcoin would still 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 is going to likely be capped at 21 million. (Related reading: What Happens Bitcoin After All 21 Million are Mined).

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Besides the short-term Bitcoin payoff, being a miner can provide 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 these issues as  forking.

Bitcoin are mined in units called"blocks." At this time of writing, the reward for completing a cube is 12.5 Bitcoin. At today's price of approximately $10,000 each Bitcoin, this means that you'd earn (12.5 x 10,000)$125,000.

When Bitcoin was mined in 2009, mining one block would earn you 50 BTC. In 2012, this was halved to 25 BTC. In 2016, this was halved into the current level 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 tabs on precisely when these halvings will happen, then you can consult with the Bitcoin Clock, which upgrades this information in real time.

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Miners are getting paid for their work as auditors. They are doing the work of verifying preceding Bitcoin transactions. This convention is meant to keep Bitcoin users honest, and was conceived by Bitcoin's founder, Satoshi Nakamoto. By verifying transactions, miners are helping to prevent the"double-spending issue."