Maybe you’ve heard of Bitcoin and are wondering how you can get involved, or you’ve already invested and are excited about the potential. But how exactly do you buy and sell Bitcoin? How do you keep it safe? How do you make sure you’re only spending the amount you can afford to lose? We’ve put together this simple guide to help you start your journey into the world of Bitcoin.
Bitcoin is a decentralized form of currency that uses blockchain technology to ensure its validity. It’s also the first cryptocurrency and has paved the way for hundreds more.
The value of the Bitcoin has been growing at a rapid pace. As the price of the coin goes up, more people are looking for ways to make money with Bitcoin. While you can still buy and sell coins, there are a number of other interesting ways to make money with Bitcoin. One of the more interesting ways is to use your computer to mine for new coins.
The way you choose to get money will more than likely be dependent on a range of factors like your technical knowledge, investment experience, how much risk you’re willing to take, and how quickly you want to see rewards.
1. Bitcoin Mining
Bitcoin mining is the mechanism used to create new bitcoins. It is a process by which transactions are verified and added to the public ledger, known as the blockchain. The entire concept of Bitcoin mining came into existence after Satoshi Nakamoto created the blockchain network and implemented it in 2009 when he released bitcoin to the world.
The actual act of bitcoin mining involves using specialized hardware and software solutions to solve tricky mathematical puzzles associated with each block on the blockchain. Once all transactions have been added, miners receive transaction fees along with newly minted bitcoins in exchange for their efforts.
These new bitcoins are then added to the blockchain and made available for anyone to purchase. This is why it is known as the “Bitcoin mining” process.
While the idea behind mining Bitcoin in its early days seemed simple enough-simply set up a computer to solve mathematical problems, and you have a chance of being rewarded with a Bitcoin-the world of cryptocurrency has changed.
Mining Bitcoin is a lot more competitive these days, and the process has become more challenging over time. In fact, it's gotten so hard that people have begun using GPUs to mine them!
More processing power is required, which means miners need specialized equipment and must fork out a lot of money on electricity. Last year, it was revealed that the Bitcoin network requires as much electricity as Ireland. This has led some to argue that Bitcoin, and other cryptocurrencies, are draining energy resources.
But what if you can't afford to purchase a mining rig or pay for the electricity needed to power it? The only option you have is to mine bitcoins using your existing computer and join a pool.
What is a pool?
A mining pool is an extensive collection of individual miners who work together and share the rewards. The more processing power you add to the pool, the greater your share of the compensation.
Bitcoin Mining is not a sure-fire way to make money, as there are plenty of easier ways. You should research different ways before you get into it because mining has its risks.
2. Trading Bitcoin
Remember that scene from ” Good Will Hunting “? “How do you like them apples, Einstein?”
That's exactly how I felt when I read a recent report by the ConvergEx Group with the title, “The $357 billion crypto market trades around $93 billion worth of crypto every 24 hours.”
I'll explain why in a moment, but first, let's make sure we are all on the same page regarding what is meant by the term “crypto market.”
So, what is the crypto market? Most people know it is the term used to describe digital currencies, exchanges, and the technology needed to operate them.
If you know how to follow a candlestick chart, you may be able to trade your way into riches with bitcoin.
Candlesticks chart the price action of a security over a specified period anywhere from a few minutes to several years. It displays the high, low, open, and close prices of the period.
Candlesticks are easy to read, and they're an essential tool for day traders who use them to identify trends and patterns in price movements. This form of analysis is prevalent in the bitcoin markets.
If you're looking to get into cryptocurrency trading, you will need to know how to avoid frauds and scams.
While the crypto space is very loosely regulated, the general rule of thumb is that if something sounds too good to be true, it probably is.
The cryptocurrency trading market is very similar to the forex market in that regard, except there are several additional concerns specific to crypto trading.
Buying The Dip: A strategy that involves buying Bitcoin when it falls in value, hoping that it will increase in value and the investor can make a profit-is a time-tested approach to growing your wealth since it allows investors to take advantage of market downturns and buy low.
But not all dips are the same.
It's important to know which drops are worth your money and which should be avoided.
It takes a lot more than a passing interest in Bitcoin to become a successful trader or day trader. If you enjoy Bitcoin and are eager to make money, you can lower your chances of losing money by doing a little research before you start trading.
Among the most simple newcomer Bitcoin trading strategies out there is buying and holding. This involves buying Bitcoins and hoping the price goes up in the future.
Before you decide to sell, it may be weeks, months, or even years.
Two other methods, both riskier than buying and holding Bitcoin, are:
- Day Trading: A style of investing involving buying and selling the same stocks or other financial instruments within one day or even within one hour. Some do it for the thrill of it, while others use it to make a living. It's not so different from swing trading or position trading, except day trading is all about timing the market for the best possible opportunity.
- Swing Trading: Similar to buying and holding, however, the holding time is not as long. Swing trading is a trendy style among investors who trade regularly but don't want to actively change in and out of their holdings every day. Instead, swing traders will buy low, wait long enough to see their holdings increase in price, and then sell high.
It takes a lot of practice to make money out of Bitcoin using these techniques, but just don't hope to get everything correct with the first attempt.
Just go out and learn more about the different pros and cons of the strategies. Then, make up your own mind and use what works for you.
3. Micro Earning Bitcoin
Wouldn't it be nice if you could make a little bit of extra money on the side, without having to trade your free time for it?
If so, you might be interested in micro earnings, which is a term for earning small amounts of money through online activities like filling out surveys and watching advertisements.
If you're looking for some extra money and need help with something, several websites will pay you in Bitcoin.
These services include completing small tasks or even just spreading the word about a company on social media.
Several Pay To Click (PTC) websites offer Bitcoin for viewing ads. Other sites pay for the completion of micro-tasks, such as filling out surveys and watching videos.
They pay a low rate – usually around a few cents for a few minutes of work
4. Allow Payments With Bitcoin
If you've got a business, you probably don't want to consider how to take Bitcoin as payment. It can be confusing and frustrating.
However, if you are already running your own business, why not consider accepting Bitcoins?
As more and more businesses start accepting Bitcoin for payments, the need to take them in exchange for goods and services becomes a necessity.
It is a matter of merely placing signage in your store next to the checkout counter if you are operating a physical establishment.
If you own an online business, adding Bitcoin as a payment option is crucial because it gives you access to over 100 million new potential customers who shop online.
This is a tremendous opportunity for your business to grow.
Bitcoin is a virtual currency that is not regulated or controlled by any government. This has many advantages, including faster processing, no credit card fees, and increased security.
However, one disadvantage of virtual currency is that its value can be volatile, making it difficult to set prices.
For example, if you decide to charge your customers $3.99 for a product that costs $3.00 to make, and the value of bitcoin drops to $2.00, you will have lost $1.99 in profit for every sale.
This is important to keep in mind if you do decide to accept Bitcoin as payment.
5. Bitcoin Lending
Bitcoins are a digital currency, and like any currency, they can be loaned.
Just like you can earn interest by lending out dollars, you can earn interest by lending bitcoins.
However, what you make from bitcoin loans is not “interest” in a traditional sense.
When you lend out bitcoins, you are not lending out the money itself and agreeing to share in its profits, but lending out the future bitcoins that will be produced as a result of processing power.
The pros and cons of bitcoin lending are well documented.
It's an interesting concept, allowing you to earn a high-interest rate on your bitcoin holdings. With interest rates on savings accounts moving close to zero in recent years, bitcoin lending provides a great alternative.
However, it's also a hazardous strategy. If you lend your bitcoin to a company that defaults, you won't get it back.
6. Set Up An Interest-Earning Crypto Account
Crypto interest rates have always been low, making sense because, well, it isn't money.
Interest rates are the price of money, and because crypto is not money, it makes sense that it would be unavailable to borrow.
However, several companies now offer the ability to earn interest on your crypto holdings. Keep in mind that these companies can't really provide ‘interest rates' with crypto because it is not money.
Instead, they offer ‘dividend rates' or ‘share of profits,' which makes sense.
Up until recently, there have been very few options to earn interest on crypto assets.
With the ability to receive compound interest, this option is attractive if you know you will hold your crypto for a more extended period and don't intend to sell quickly.
7. Bitcoin Tipping
People tip all sorts of professionals for all kinds of reasons, from bartenders to valets to exterminators.
But the ones that really deserve a big tip are people who help others in their daily lives, including a lot of people who work in fields that don't seem like they're helping at all.
When you think about it, though, just about every job, no matter how seemingly dull or menial, allows people to help others in some way.
Several platforms, such as Tipprbot, thebitcoinjar, and Tippin, allow the sending of Bitcoin as a tip in return for help with various small tasks
Some social media platforms like Reddit and Twitch have Bitcoin tipping functionality built-in.
If you are a liked contributor on those platforms, others can send you BTC tips.
The crypto economy is continuously growing.
The industry has been around for about a decade, and it was worth $0 in the beginning. However, its value has grown exponentially to over $200 billion, and there's no telling how much it will be worth in the future.
As cryptocurrencies become more mainstream, so do their use cases; people are now using them as collateral for loans or even purchasing real estate with Bitcoin (BTC).
Before taking the dive into Bitcoin, ensure you evaluate the risks and the expertise needed.
Disclaimer: The material in this blog post is not legal, financial, investment, or other advice and is not intended to be so.