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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 its 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 absolutely free from regulation (for the moment), allows for completely anonymous ownership, and is both highly rewarding and almost free to create (if you're willing to violate the law).

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There is no doubt the bitcoin has staying power, but whether that's only among criminals (and those who would like to traffic with them, such as the Silk Road drug sellers and customers), or if it is going to become a valuable trading commodity for the rest of us is unclear.

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My advice to law enforcement is easy: follow the bitcoin. There's no doubt that more and more criminals will be using bitcoin to generate profit in addition to pay their tracks. Whenever you find a stash of bitcoin and have judicial permission to follow the footprints, do so.

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While bitcoin usage is not limited to criminals, there's an undeniably large correlation between bitcoin ownership and criminal action. Especially since bitcoins are becoming every more profitable to criminal malware seeders and botnet operators while concurrently becoming less rewarding for traders that are valid.

Here's the vital 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 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 do it

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Well, before you invest the time and equipment, browse this explainer to find out whether mining is really for you. We will focus primarily on Bitcoin. (Related: How Bitcoin Works and our helpful infographic, What's Bitcoin)

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By mining, you can earn cryptocurrency without having to put down money for it. That said, you certainly don't need to become a miner to own crypto.   You can even buy crypto using fiat currency (USD, EUR, JPY, etc); you can trade it on an exchange such as Bitstamp using other crypto (example: Using Ethereum or NEO to buy Bitcoin); you even can earn it by playing video games or even simply by publishing blogposts on platforms that pay its consumers in crypto.

In addition to lining the pockets of miners, mining functions a second and critical purpose: It is the only way to release new cryptocurrency into circulation. In other words, miners are basically"minting" currency. By way of example, as of the time of writing this bit, there were approximately 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 official source a time when Bitcoin mining ends; each the Bitcoin Protocol, the number of Bitcoin will be capped at 21 million. (Associated reading: What Happens Bitcoin After imp source All 21 Million are Mined).

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Aside from the short-term Bitcoin payoff, being a miner can give you"voting" electricity when changes are proposed in the Bitcoin protocol. In other words, an effective miner has influence on the decision-making process on these issues as  forking.

Bitcoin are mined in units known as"blocks." As of this time of writing, the reward for completing a block is 12.5 Bitcoin. At today's price of about $10,000 per Bitcoin, this means that you'd earn (12.5 x 10,000)$125,000.

When Bitcoin was 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 payoff size will be halved again to 6.25 BTC.

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If you want to keep track of precisely when these halvings will happen, you can consult the Bitcoin Clock, which upgrades 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 preceding Bitcoin transactions. This convention is meant to keep Bitcoin users honest, and has been conceived by Bitcoin's founder, Satoshi Nakamoto. By verifying transactions, miners are helping to prevent the"double-spending problem."