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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 the world over. Criminal bitcoin thieves don't incur the exchange rate fee for acquisition of bitcoins. They just 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) that has 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 create (if you're willing to break the law).
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There's no doubt the bitcoin has staying power, but if that is only among criminals (and those who would like to traffic together, such as the Silk Road drug sellers and customers), or if 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 simple: follow the bitcoin. There is no doubt that more and more criminals will be using bitcoin to generate gain as well as pay their tracks. Whenever you see a stash of bitcoin and possess judicial permission to follow the footprints, do this.
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While bitcoin usage is not confined to criminals, there's an undeniably large 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"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 has a magnetic draw for many investors interested in cryptocurrency. This may be because entrepreneurial types 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. (Connected: 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 for it. That said, you certainly don't have to be a miner to own crypto.  You can also buy crypto using fiat currency (USD, EUR, JPY, etc); you can exchange it on an exchange such as Bitstamp using our website other crypto (instance: Using Ethereum or NEO to purchase Bitcoin); you even can earn it by playing video games or even 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's the only way to discharge new cryptocurrency into circulation. In other words, miners are basically"minting" currency. By way of instance, at 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 might 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. (Associated reading:Â 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, 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 this time of writing, the reward for completing a block is 12.5 Bitcoin. At today's cost of approximately $10,000 per 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 happen, then you can consult with the Bitcoin Clock, which updates this information in real time.
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Miners are getting paid for their work as auditors. They are doing the work of verifying preceding Bitcoin transactions. This convention is meant to maintain Bitcoin users honest, and has been conceived by Bitcoin's founder, Satoshi Nakamoto. By verifying transactions, miners are helping to prevent the"double-spending issue."