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

Criminal miners pay virtually 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 cost for acquisition of bitcoins. They just 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) with a current value, is absolutely free from regulation (for the moment), allows for completely anonymous ownership, and is both highly rewarding and nearly free to create (if you're willing to break the law).

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There's no doubt the bitcoin has staying power, but whether that is only among criminals (and people who wish to traffic with them, like the Silk Road drug sellers and clients ), or whether it is going to 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 profit in addition to cover their tracks. Whenever you find a stash of bitcoin and possess judicial permission to follow the footprints, do so.

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While bitcoin use is not limited to criminals, there's an undeniably high correlation between bitcoin ownership and criminal activity. 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 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 includes a magnetic draw for many investors interested in cryptocurrency. This might be because entrepreneurial types see mining as pennies from heaven, such as California gold prospectors in 1848. And If You're technologically inclined, why not take action

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Before you invest time and equipment, read this explainer to find out whether mining is for you. We'll focus primarily 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 have to be 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 (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 that pay its consumers in crypto.

In addition to lining the pockets of miners, mining functions a second and critical purpose: it's the only way to release new cryptocurrency into circulation. In other words, miners are essentially"minting" currency. By way of example, as of the time of writing this piece, 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'll come a time when Bitcoin mining ends; per the Bitcoin Protocol, the number of Bitcoin will be capped at 21 million. (Related 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" electricity when changes are proposed 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 known as"blocks." As of the time of writing, the reward for completing a cube is 12.5 Bitcoin. At today's price of approximately $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 would 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 payoff 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 occur, 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 try this honest, and was conceived by Bitcoin's founder, Satoshi Nakamoto. By verifying transactions, miners are helping to prevent the"double-spending problem."