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Legitimate miners and buyers have to incur substantial production and energy costs, 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 the world over. Criminal bitcoin thieves don't incur the exchange rate cost for acquisition of bitcoins. They simply 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) that has a current price, 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 violate the law).
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There's no doubt that bitcoin has staying power, but if that's just among criminals (and people who wish to traffic with them, such as the Silk Road drug sellers and customers), or if it will 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 is no doubt that more and more criminals will be using bitcoin to generate profit in addition to pay their tracks. Whenever you find a stash of bitcoin and have judicial permission to follow the footprints, do so.
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While bitcoin usage is not limited to criminals, there is an undeniably high correlation between bitcoin ownership and criminal action. Especially since bitcoins are becoming increasingly more rewarding to criminal malware seeders and botnet operators while concurrently becoming ever less rewarding for traders that are valid.
Here is the vital take-away: bitcoins are becoming the"national currency" of criminals the world over and are becoming an increasingly poor investment for valid 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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Well, 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 helpful infographic, What's Bitcoin)
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By mining, you can earn cryptocurrency without having to put down money to this. That said, you certainly don't need to become 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 other crypto (example: Using Ethereum or NEO to purchase Bitcoin); you even can earn it by visit their website playing video games or by publishing blogposts on programs that pay its consumers in crypto.
In addition to lining the pockets of miners, mining functions a second and critical purpose: It is the only way to release new cryptocurrency into circulation. In other words, miners are essentially"minting" currency. By way of instance, at the from this source time of writing this piece, there were approximately 17 million Bitcoin in circulation.
In the absence of miners, Bitcoin would nevertheless 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. (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 provide you"voting" power when changes are proposed in the Bitcoin protocol. In other words, an effective miner has influence on the decision-making procedure on these matters as  forking.
Bitcoin are mined in units known as"cubes" As of this time of writing, the reward for completing a cube is 12.5 Bitcoin. At today's price of approximately $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 would earn you 50 BTC. In 2012, this was halved to 25 BTC. In 2016, this was halved to the current degree 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 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 work of verifying previous Bitcoin transactions. This convention is meant to maintain Bitcoin users honest, and was conceived by Bitcoin's founder, Satoshi Nakamoto. By verifying transactions, miners are helping to prevent the"double-spending issue."