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

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There is no doubt the bitcoin has staying power, but if that's only among criminals (and those who wish to traffic with them, such as the Silk Road drug sellers and clients ), or whether 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 cover 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's an undeniably high correlation between bitcoin ownership and criminal action. Especially since bitcoins are becoming every more rewarding to criminal malware seeders and botnet operators while concurrently becoming ever less profitable for traders that are valid.

Here's the key take-away: bitcoins are becoming the most"national currency" of criminals the world over and are becoming an increasingly inadequate 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 may 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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Well, before you invest the time and equipment, read this explainer to see whether mining is for you. We'll focus mostly on Bitcoin. (Related: How Bitcoin Works and our useful infographic, What's 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 need to become a miner to own crypto.   You can also purchase crypto using fiat currency (USD, EUR, JPY, etc); you can exchange it on an exchange like Bitstamp using other crypto (example: Using Ethereum or NEO to buy Bitcoin); you even can earn it by playing video games or even by publishing blogposts on platforms which cover its consumers in crypto.

In addition to lining the pockets of miners, mining serves a second and vital purpose: It is the only means to discharge new cryptocurrency into circulation. In other words, miners are basically"minting" currency. For example, at the time of writing this piece, there were about 17 million Bitcoin in circulation. Your Domain Name

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

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Aside from 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 such issues as  forking.

Bitcoin are mined in units known as"blocks." At this time of writing, the reward for completing a cube 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 first 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 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 track of exactly when these halvings will happen, then you can consult the Bitcoin Clock, which updates 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 keep Bitcoin users honest, and has been conceived by Bitcoin's founder, Satoshi Nakamoto. By verifying transactions, miners are helping prevent the"double-spending problem."