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If you want to join in the bitcoin frenzy without just buying the digital currency in today's inflated prices, then bitcoin mining is another way to become involved. But, mining bitcoins does come with expenses -- and dangers -- of its own. And also the more popular bitcoins become, the harder it is to mine profitably. .

Unlike paper currency, which can be printed by governments and issued by banks, bitcoins do not arrive in any physical type. That creates a significant risk, as hackers could theoretically produce bitcoins from nothing. Bitcoin mining is how the bitcoin network retains its transactions protected.

Bitcoin transactions are secured by blockchains, which compose a public ledger of transactions. Due to the way blockchain transactions are structured, they're extremely difficult to change or compromise, even from the top hackers. But in order to secure those transactions, someone needs to dedicate computing power to verifying the action and packaging the details in a block which goes into the bitcoin ledger.

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As a reward for doing the job to track and secure transactions, miners earn bitcoins for every block they effectively process. .

The bitcoin founders have set a limit of 21 million bitcoins available for mining. Once that total is reached, miners will still be able to benefit from transaction fees, but they won't be granted bitcoins as a reward for their work. As of mid-January 2018, approximately 16.8 million of those 21 million bitcoins have already been mined.  Assuming the bitcoin mining industry doesn't change radically, it looks like we won't hit the 21 million-bitcoin limit until the year 2140. .

During the early days of bitcoin mining, miners would often download a software package designed to allow their computers to process bitcoin transactions in the background. Unfortunately, that is no longer sensible, because solving bitcoin transactions has become too difficult for your computer to manage.

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The bitcoin network is designed to make a certain number of new bitcoins each 10 minutes. If only a couple people have been bitcoin mining at any given time, then the network will be generous and discuss bitcoins readily in order to attain the predetermined number. However, now this bitcoin mining has become so widespread, the network has become much stingier about handing out bitcoins to miners.

Nowadays, in order to have a chance at being profitable, miners need to adopt one of two strategies: 1) buy specialized hardware (aka a bitcoin mining rig) or 2) join a cloud mining pool. .

To get started with your own mining rig, you purchase hardware designed for mining bitcoin (or any other digital currency), set it up, and let it run 24/7 solving bitcoin transactions. Ideally, this will result in a continuous flow of payments without your needing to get involved.

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While it's fairly simple to establish and use a bitcoin mining rig, actually making money on the process is something of a challenge. Because more and more people are signing up to mine bitcoins, the mining process continues to have more difficult and will likely keep doing so for a while.

And because bitcoin mining rigs aren't cheap -- expect to pay at least $1,000 for the hardware, or even several times that for a top-quality rig -- having to replace it every year or 2 takes a huge bite from any profits you earn from mining. Plus, most mining channels consume enormous amounts of power, which means you also need to subtract that expense from the bitcoins you earn to determine your own profits. .

When buying and maintaining your own mining gear doesn't appeal to you, then cloud mining may be the way to go. Cloud mining companies invest in huge mining rigs, often filling entire information centers with the hardware, and then sell subscriptions to individuals interested in dipping a toe into bitcoin mining.

The largest challenge facing cloud mining subscribers is avoiding fraud. The area is rife with pseudo-companies that sell thousands of multiyear subscriptions, cover for a few months, and then disappear into the sunset. In case you choose to try out cloud mining, do your homework in advance and confirm that the company that you're dealing with is a real cloud miner and not a scheme.

Avoid companies with anonymous Resources domain registration (you can look up their registration info Network Solutions), in addition to any mining company that"guarantees" gains or offers huge incentives for referring new customers; anything above a 10% referral commission is deeply suspicious, because legitimate mining pools simply don't generate a high enough profit margin to pay big commissions. .