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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 work to hapless victim machines all over the world. Criminal bitcoin thieves don't incur the exchange rate fee for acquisition of bitcoins. They simply rely on hacking and malware to siphon bitcoin pockets from law-abiding owners.

What we've got here, then, is a commodity (I hesitate to call it a currency) that has a current value, is free from regulation (for the moment), allows for completely anonymous ownership, and is both highly profitable and almost free to create (if you're willing to violate the law).

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There's no doubt the bitcoin has staying power, but whether that's only among criminals (and those who wish to traffic together, like the Silk Road medication sellers and customers), 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 easy: 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 possess judicial permission to follow the footprints, do this.

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

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

Cryptocurrency mining is painstaking, expensive, and only sporadically rewarding. Nonetheless, mining includes a magnetic draw 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 do it

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Before you invest the time and equipment, read this explainer to find out whether mining is really for you. We'll 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. Nevertheless, 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 exchange it on an exchange like Bitstamp using other crypto (instance: 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 serves 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, at the time of writing this piece, there were approximately 17 million Bitcoin in circulation.

In the absence of miners, Bitcoin would nevertheless 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 likely be capped at 21 million. (Associated reading: What Happens Bitcoin After All 21 Million are Mined).

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Besides the short-term Bitcoin payoff, being a miner can give you"voting" power when changes are suggested in the Bitcoin protocol. In other words, a successful miner has influence on the decision-making process on these issues as  forking.

Bitcoin are mined in units called"blocks." As of this time of writing, the reward for completing a cube is 12.5 Bitcoin. At today's price of about $10,000 each Bitcoin, this means 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 to the current level 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 tabs on exactly when these halvings will happen, then 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 are doing the job of verifying previous Bitcoin transactions. This convention is meant to maintain important site Bitcoin users honest, and was conceived by Bitcoin's founder, Satoshi Nakamoto. By verifying transactions, miners are helping prevent the"double-spending problem."