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Legitimate miners and buyers have to incur substantial production and energy expenses, or need 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 all over the world. 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) that has a current value, is free from regulation (for the moment), allows for completely anonymous ownership, and is both highly rewarding and almost free to create (if you're willing to violate the law).

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There's no doubt that bitcoin has staying power, but whether that is only among criminals (and those who would like to traffic together, such as the Silk Road drug sellers and customers), 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 easy: follow the bitcoin. There's no doubt that more and more criminals will be using bitcoin to generate profit as well as cover 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 limited to criminals, there is an undeniably high correlation between bitcoin ownership and criminal activity. Especially since bitcoins are becoming every more profitable to criminal malware seeders and botnet operators while concurrently becoming less rewarding for traders that are valid.

Here is the vital take-away: bitcoins are becoming the most"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 attraction for many investors interested in cryptocurrency. This may 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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Before you invest time and equipment, read this explainer to see whether mining is really for you. We'll focus mostly on Bitcoin. (Related: 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 have to be a miner to own crypto.   You can even purchase crypto using fiat currency (USD, EUR, JPY, etc); you can exchange it on an exchange like Bitstamp using other crypto (example: Using Ethereum or NEO to buy Bitcoin); you even can earn it by playing video games or by publishing blogposts on platforms which cover its users in crypto.

In addition to lining the pockets of miners, mining serves a second and vital 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 bit, there were about 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'll come a time when Bitcoin mining ends; per the Bitcoin Protocol, the number of Bitcoin is going to be capped at 21 million. (Related reading: What Happens 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, a successful miner has influence on the decision-making procedure on these issues as  forking.

Bitcoin are mined in units called"blocks." As of this time of writing, the reward for completing a block is 12.5 Bitcoin. At today's cost of about $10,000 each 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 to the current level of 12.5 BTC. In 2020 or so, the reward Home Page size will be halved again to 6.25 BTC.

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If you want to keep track of precisely 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 previous 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 prevent the"double-spending problem."