What image do you see in your mind when you read or hear the word “Bitcoin”? A Thai Baht symbol atop a shiny coin? Do you think that is how bitcoin looks? If that is what you believe, then you have a lot of learning to do in this area. Worry not, By the end of this article you will get a clear idea about what bitcoins are and ten ways to make money with bitcoins.
Let’s begin with taking the image of that shiny coin out of your mind. Bitcoin doesn’t look like that. Then what does it look like? To explain it to you without much confusion, bitcoin is like software, it completely is a digital phenomenon. So how do you think it looks? Mostly lines and codes, isn’t it?
What actually is this Bitcoin? Why and how did this get so popular?
Simply put, Bitcoin is a digital currency. It was launched in the year 2009. The main property of this currency is that it doesn’t need any intermediaries like governments and banks. It is a decentralized system that uses distributed ledgers called blockchains to record transactions.
You might think if Bitcoin is merely a digital currency, how did it get to be so popular and what made it so valuable?
To answer this question lets begin with a simple question of how do currencies gain their value among others? All the successful currencies have the following six attributes that make them valuable. They are Scarcity, Utility, Divisibility, Transportability, Counterfeit Ability and Durability. Still, wondering how bitcoin got its value? Well, bitcoin has all these six attributes, hence the value.
Without further delay, let’s dive into our topic and find out 10 ways in which you can make money with bitcoins.
How are bitcoins obtained in the first place?
One word – Mining.
No, no! You don’t need to go around wearing a helmet with a torch on your head and a pickaxe and hammer in your hands, this isn’t that kind of mining. This mining requires you to solve complex mathematical problems called blocks using powerful computers in order to earn bitcoins that are newly minted. This is basically like a competition in which the fastest one to solve the block will reap the rewards which are the bitcoins. This is through which the bitcoins are obtained in the first place.
But mining wasn’t as simple as it is today. Now, you need top-tier equipment to solve the blocks. Since bitcoin has earned a lot of popularity, you will have to face tough competition if you want to make money through bitcoin mining. You will need top-tier mining equipment to do so. Antminer S19 is the latest version of the bitcoin ASIC (Application-Specific Integrated Circuit) miner that is trending among bitcoin miners and is helping them make more money through it.
You can always mine solo or you can join the mining pools and clouds to generate blocks quicker. A mining pool is where a group of miners collaborate to solve the blocks quickly and the Mining cloud is where the miners use the cloud to connect to the equipment so that they can go on mining without having to install and run the related software and hardware on their systems directly. Both ways you’ll receive your part of the earnings as they were split equally among the members of the group.
Buy and HODLing
HODLing?? No, that isn’t a typo. Well, it began as a typo when a trader misspelt HOLD as HODL, but now is the term popularly used among Bitcoin users. This HODLing refers to Buying bitcoins when they are cheap and waiting for their value to go up. You need to hold on to the bitcoins however long it takes for the value to go up, let it be weeks, months or even years. Just hold on. HODL is also popular among the Bitcoin community as “Hold On for Dear Life”. This method might seem easier but it might take up a lot of time as you have to wait till the value goes up.
Bitcoin Lending is a way through which you can make money with bitcoins by lending them to others for a period of time and in turn earning interest on them. Well, if you have already decided to HODL your bitcoins, then lending your bitcoins can help you keep them in flow while you wait for the value to go up and at the same time can earn you money.
Trading is a popular way of making money in any field. With bitcoins, you can make money through three different types of trades. Day trading is one among them. In bitcoin day trading, the trader buys bitcoins and sells them from smaller profits. This trade is instant and has a short span. The day traders carefully analyse the market and look for small opportunities to make a profit and utilize it. Day trading is something you can choose if you don’t prefer waiting for long periods.
Like you already know, there are three types of trading through which you can make money with bitcoins. You already know that through Day trading you can make money in a short span of time, unlike HODLing which might require you to wait for longer periods of time. Well, you can consider Swing trading as something in between them. In Swing Trading, traders will buy the bitcoins at a lower value, wait for the value to go up and then sell them at a higher value. However, the holding time of this kind of trading isn’t short like in the day trading and at the same time isn’t as long as in the HODLing.
Bitcoin Arbitrage is similar to the trading options that are already mentioned in this article and also different at the same time. In Bitcoin Arbitrage the traders will perform the trade in different exchanges. To explain more clearly the trader buys bitcoins from Exchange ‘A’ which has lower prices and sells them in Exchange ‘B’ which has higher bitcoin prices and makes a profit through it.
If you are patient enough to watch a few advertisements and complete a few tasks like filling up surveys, Bitcoin Faucets is one of the ways you can make money. Wondering what Bitcoin Faucets are? These are the sites that will pay you in bitcoin fractions called Satoshis(0.00000001 BTC ) for completing simple tasks for them. These can include tasks like clicking on ads, watching videos, filling out surveys and downloading applications.
Creating Content on Bitcoin
Even though you find a lot of information about bitcoins on the internet there is only a little content that is original, most of the content that you find about bitcoins is copied from the information which is already there. So if you are someone who has a good knowledge of bitcoins and can create decent content, you can earn money through it. There are a lot of websites that will pay you for your content if you have the skills.
Binary trading is two-way trading like the name suggests. As a part of this trade, the trader will purchase an option along with the expiration time and bet on where the price will go at the end of the expiration time.
Let’s say the price of the bitcoin is ‘X’ USD at 9 am, you can bet that the price will go up or down by 6 pm. If you win the bet you will get payment of a percentage of the investment you made. If you lose, you lose the investment too.
Run a master node
To put it in technical terms, Masternode is the special network node that keeps track of the activities of the blockchain. They are like the “parents” on the blockchain, as they keep the network in order by providing a structure to it. Since running a master node needs a lot of effort and needs to spend a fair amount of coins on it, they get paid good and high incentives.
If you want to run a master node, you need to make sure that you have good computing capacity and server capacity so that you will be able to host the full transaction history of the bitcoins.
Bitcoin is on the rise in the world of finance. The liquid and flexible nature of bitcoin make it perfect for investing and in turn make tons of money through it. There are a lot of people who rose up to be millionaires and billionaires through investing bitcoins. Hope this article has provided you with the information you were looking for. If you are interested in making money with bitcoins, just be a bit careful in the analysis part of the trade and you are good to go.