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

Criminal miners pay nearly nothing for the production of new coins, outsourcing the job to hapless victim machines the world over. Criminal bitcoin thieves don't incur the exchange rate fee 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 price, is absolutely free from regulation (for the moment), allows for completely anonymous ownership, and is both highly profitable and nearly free to produce (if you're willing to break the law).

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There is no doubt that bitcoin has staying power, but whether that's only among criminals (and people who would like to traffic with them, like the Silk Road drug sellers and clients ), or whether 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's no doubt that more and more criminals will be using bitcoin to generate profit as well as pay their tracks. Whenever you see a stash of bitcoin and have judicial permission to follow the footprints, do this.

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While bitcoin use is not confined to criminals, there is an undeniably high correlation between bitcoin ownership and criminal action. Notably since bitcoins are becoming every more profitable to criminal malware seeders and botnet operators while concurrently becoming less profitable 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 poor investment for legitimate miners.

Cryptocurrency mining is painstaking, expensive, and only sporadically rewarding. Nonetheless, mining has a magnetic attraction for many investors interested in cryptocurrency. This might be because entrepreneurial forms see mining as pennies from heaven, such as California gold prospectors in 1848. And if you are technologically inclined, why not take action

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Before you invest time and equipment, read this explainer to see whether mining is really for you. We'll focus mostly on Bitcoin. (Related: How Bitcoin Works and our useful infographic, What is Bitcoin)

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By mining, you can earn cryptocurrency without having to put down money to this. That said, you certainly don't have 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 (instance: Using Ethereum or NEO to purchase Bitcoin); you even can earn it by playing video games or even simply by publishing blogposts on platforms which pay its consumers in crypto.

In addition to lining the pockets of miners, mining serves a second and critical purpose: It is the only means to discharge new cryptocurrency into circulation. In other words, miners are essentially"minting" currency. For instance, at the time of writing this bit, there were approximately 17 million Bitcoin in circulation.

In the absence of miners, Bitcoin would still exist and be usable, but there would never be any additional Bitcoin. There will come a time when Bitcoin mining ends; each the Bitcoin Protocol, the number of Bitcoin will be capped at 21 million. (Related reading: What Happens Bitcoin After All 21 Million are Mined).

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Aside from the short-term Bitcoin payoff, being a miner can provide you"voting" power when changes are suggested in the Bitcoin protocol. In other words, an effective miner has influence on the decision-making process on such matters 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 cost of about $10,000 per Bitcoin, this means 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 to the current level of 12.5 BTC. In 2020 or so, dig this the reward size will be halved again to 6.25 BTC.

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If you want to keep tabs on exactly when these halvings will occur, 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're doing the job of verifying previous Bitcoin transactions. This convention is meant to maintain Bitcoin users honest, and was conceived by Bitcoin's founder, Satoshi Nakamoto. By verifying transactions, miners are helping to prevent the"double-spending issue."