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

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There is no doubt the bitcoin has staying power, but whether that's just among criminals (and those who wish to traffic together, 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 information to law enforcement is simple: follow the bitcoin. There is no doubt that more and more criminals will be using bitcoin to generate gain as well as cover their tracks. Whenever you see a stash of bitcoin and have judicial permission to follow the footprints, do so.

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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 increasingly more profitable to criminal malware seeders and botnet operators while concurrently becoming ever less rewarding for traders that are valid.

Here is the key take-away: bitcoins are becoming the most"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 includes a magnetic draw for many investors interested in cryptocurrency. This might be because entrepreneurial forms see mining as pennies from heaven, like California gold prospectors in 1848. And if you are technologically inclined, why not take action

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Well, before you invest time and equipment, read this explainer to find out whether mining is for you. We'll focus primarily on Bitcoin. (Connected: 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 to it. That said, you certainly don't need to be 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 users 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 essentially"minting" currency. For instance, at the time of writing this bit, there were about 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 likely be capped at 21 million. (Related reading: What Happens to 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 the time of writing, the reward for completing a block 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 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 reward size will be halved again to 6.25 BTC.

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If you want to keep tabs on precisely 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 over here are getting paid for their work as auditors. They're doing the job of verifying preceding Bitcoin transactions. This convention is meant to keep Bitcoin users honest, and was conceived by Bitcoin's founder, Satoshi Nakamoto. By verifying transactions, miners are helping to prevent the"double-spending problem."