All about Bitcoin
Bitcoin is a digital currency that has taken the finance world by storm since its inception in 2009. While it got off to a slow and rocky start it has ultimately become one of the most sought after currencies in the world. The currency was started by a man named Satoshi Nakamoto who set out his blueprint for his creation in is white paper. This was where the first idea of how to make money with cryptocurrency came to be.
Bitcoin is a digital currency that is fully decentralised which means that no central bank or government has any control over it. The digital currency is a peer-to-peer payment system in which the network is essentially cutting out the middle man. It is the users of Bitcoin that make the network secure. Each individual Bitcoin transaction is verified by Bitcoin miners who are then rewarded for their efforts. It is thus a system that is completely self-sufficient in its security and ability to safely transact.
Our guide is going to go into more detail about why Bitcoin has become such a lucrative way to make money. One of the main reasons for this is because there is a max supply cap on the amount of coins that will eventually be in circulation. The total amount that will ultimately be in circulation is 21,000,000 coins. This is significantly less than your average commodities like gold or other precious metals which is a major part of why Bitcoin continues to rise in value. So, with that in mind, let’s take a closer look at the factors that influence the value of Bitcoin.
Why Bitcoin has value
It is easy to understand why your average fiat currency holds value as you appreciate the fact that it is backed up by a physical commodity like gold or platinum. Bitcoin on the other hand, is not a representation of any commodity or physical coin. So, this begs the question, how does Bitcoin have value? At the end of the day, a currency has value because all it really needs is trust and adoption. This is exactly what Bitcoin continues to build and it does so with a few key factors:
Where once Bitcoin was thought of as a shady business that you potentially couldn’t trust it is now known as one of the safest networks in the world. The Bitcoin network is secure for a number of reasons but the most pertinent reason is that it offers its users a level of anonymity that other fiat currencies can’t. Basically, the Bitcoin network masks users’ identities in the blockchain once they have completed a Bitcoin transaction. And while the blockchain information is public record there is no way for outside parties to verify that you were the one you conducted a taanction. This protects you from any additional threats and gives you a strong sense of privacy when executing Bitcoin payments.
As we mentioned before, one of the reasons that currency grows in value is due to adoption and trust. However, the supply of a currency can also influence the potential for its value to rise. With Bitcoin, there is a total supply cap of 21,000,000 coins that will eventually all be in circulation. As it stands there are a little under 3,000,000 million coins left to be “mined”. As more people begin to adopt Bitcoin as a currency the more the value of the remaining supply rises. In a nutshell, because there is a finite amount of Bitcoin to get your hands on, it drives the price up as the remaining coins are mined and put into circulation.
One of the biggest strengths of Bitcoin is the fact that it uses blockchain technology. One of the main reasons that Bitcoin and its use of blockchain are so flexible is because the system does not require any trust between peers in order for the network to function properly. This is because all transactions are verified and audited which helps to maintain the network and keep it running at an optimal level.
The most common problem with your average fiat currency is that your cash is susceptible to degradation. Meaning, it can be torn, burnt or soaked. Whatever the case might be the point is that it can be vulnerable and thus unusable. Bitcoin subverts this problem as there are no physical coins you use to make your purchases. However, you can still lose your cryptographic key which you use to access your Bitcoin wallet. Aside from that, there is no fear of having your Bitcoin being destroyed or marred by any of nature’s curve balls.
Who can make money with Bitcoin?
When people wonder how to make money with Bitcoin they may have a few predetermined ideas about who the cryptocurrency is really available for. The truth of the matter is that anyone can make money with Bitcoin. As it stands the value of 1 BTC is $55,000 (more than likely to change by the time you read this guide) which can seem off-putting to those who can’t afford to spend that kind of money.
Therein lies the beauty of the cryptocurrency. You don’t need to buy a full Bitcoin in order to make a profit. You can buy a fraction of a bitcoin. This means that instead of dropping the full $55,000 on 1 BTC you could hypothetically buy 0,1 BTC for $5,500. You can go even lower than that if you want to, the possibilities for the amount of Bitcoin you want to purchase are not limited. As such, when people wonder how to make money with Bitcoin, they need not fear the rising value. As they can buy within their own means and limits.
How to make money with Bitcoin
Now that you have a better grasp on why Bitcoin is so valuable, you may now be wondering how to make money with Bitcoin yourself. There are a number of ways for you to get in on the act. Some of these ways are more complex than others but we will walk you through them. Here are the ways that you can currently make money with Bitcoin:
Knowing how to make money with Bitcoin can be tricky but a great place to start would be with investing. This is a straightforward process that may differ depending on your financial standing. Essentially, you can buy Bitcoin (any amount you choose) and store that currency in a cold wallet (a wallet not connected to the internet). This is how you can invest in the currency.
By holding onto what you have purchased and waiting for the currency to spike further down the line you are making an investment for the future. This is what most people do when it comes to making money with Bitcoin as it is a fairly sound investment. Speak to a financial advisor about this as Bitcoin does experience drops in value at times so you may need some advice for when these occasions naturally arise.
Those who wonder how to make money with Bitcoin may turn to trading to try and turn a profit. Trading on Bitcoin exchanges or with crypto brokers can be tricky and will require that you put the effort in to do some homework and research on the markets. There are a couple of ways to go about trading Bitcoin that may give you a decent answer on how to make money with Bitcoin.
Day trading with Bitcoin aims to make small cumulative profits and of course, never holding a position over night. You need to be able to spot an opportunity in the market to make a small profit and then continue to do so with any others that you might see. As we say, the profits may not be astronomical with this form of trading but with enough time and effort in a session you can cumulatively build up a decent profit from various opportunities that you have capitalized on. When you are trying to understand how to make money with Bitcoin, day-trading is a decent place to start.
Then you could opt for methods like swing trading or arbitrage trading, Swing trading Bitcoin essentially sees you buy as low as possible and then sell off your Bitcoin when you observe an opportunity to make money. This differs to day trading because you can hold your position for longer and wait for the right time to strike in the market.
Arbitrage trading has similarities to the previous two strategies but it requires that you expand your horizons in terms of the exchanges you are using. You can make use of an arbitrage trading strategy by buying Bitcoin from one exchange and selling it at a higher price on another exchange.
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When it comes to knowing how to make money with Bitcoin you need to take Bitcoin mining into account. Bitcoin mining is definitely the most complex of the options we have discussed so far, but once you get the hang of it you shouldn’t have too much trouble understanding the concept.
Bitcoin mining is essentially the process of solving complex numeric puzzles or problems on the Bitcoin network. Solving these numeric problems is the process of verifying Bitcoin transactions on the network. Those who solve the problem first are rewarded with Bitcoin. In order to become a miner, you will need to set up a mining rig (an expensive computer setup). The rig will solve these complex problems for you at an exceptionally fast rate.
Bitcoin mining can be an expensive endeavour and so in itself is a long term investment. The rigs are expensive and the electricity costs even more so in the long run. However, when the question is asked “how can you make money with Bitcoin?” This is certainly one of the more profitable avenues.
Tips for how to make money with Bitcoin:
Before we see farewell, we want to give you a couple of handy tips to take with you on your Bitcoin adventures. It can be tricky to know how to make money with Bitcoin so having some additional advice in the back pocket is never a bad thing. Here are our tips to help you to better understand how to make money with Bitcoin:
Join a mining pool
We touched on the concept of Bitcoin mining previously in our guide as it is a viable way for you to know how to make money with Bitcoin. However, mining on your own can be an expensive and exceedingly difficult thing to do. When you mine on your own you compete against other massive mining farms with the sole purpose of mining Bitcoin en masse. So, how can you make money with Bitcoin when you have to mine against these corporate farms?
The best way for you to do so is to join a mining pool. A mining pool is a bigger group of people who all contribute towards mining Bitcoin. The rewards are then shared accordingly within the collective. The main benefit of a mining pool is that you are sharing the costs of mining. So, things like electricity costs can be brought down to a more manageable amount when you are working in a collective mining pool. Furthermore, you have a better chance of mining Bitcoin more effectively when working within a team of people.
Play on Bitcoin casinos
When you think about how to make money with Bitcoin, joining a Bitcoin casino may not be the first thing you think about. However, Bitcoin casinos are becoming more and more popular as you can win Bitcoin at a quicker rate than you would perhaps mining for it. These casino sites have become far more sophisticated and offer you a number of games to play. Fancy yourself an excellent poker player? You can play for Bitcoin on these sites by playing at their poker, blackjack and baccarat tables.
There is of course far more chance of losing outright with these casinos because they are largely based on pure statistical chance. However, we would recommend sticking to games that require more skill like blackjack and poker
How to make money with Bitcoin: Conclusion
People want to know how to make money with Bitcoin more and more every day now. Hopefully our guide on how to make money with Bitcoin has given you some more insight into how you can make this a reality for yourself. There are a number of different paths you can take to try and make money with Bitcoin.
Remember, you will need to do some homework on whatever path you decide to take. Whether that be trading Bitcoin, Bitcoin mining or investing. There is no magical shortcut for success when it comes to knowing how to make money from Bitcoin, unfortunately. It will require some effort on your part to know how to make money with Bitcoin.
How to Make Money with Bitcoin – FAQ
❓How does Bitcoin make money?
People still ask “Can you make money with Bitcoin?” and that is a fair question to be asking. At TradersBest.com, we try to clear this up for you with our guide by giving you a detailed look at how Bitcoin trading can be profitable – and of course, the things to look out for in this volatile market.
✍Can I learn how to make money with Bitcoin?
The next step after learning more about the cryptocurrency is knowing how to make money with Bitcoin. There are a number of different ways that you can do so but it comes down to what method is going to suit you best. Our guide gives you a detailed look at the different ways to make money with Bitcoin and how complex each of these different methods are.
💷Is Bitcoin mining profitable?
Bitcoin mining can be an exciting endeavour to take on but there are many different factors to consider before you try to execute it. Our guide on how to make money with Bitcoin will give you a comprehensive look at how you can take part in Bitcoin mining and how it can help you to make money from Bitcoin trading apps.
💡Is making money from Bitcoin difficult?
Like everything in this life, you will need to work for what you want. With that being said, each method for making money with Bitcoin will vary in terms of its complexity and difficulty to execute properly. Our guide will help you to better understand what method will best suit your skillset and what method will help you to know how to make money with Bitcoin and other cryptocurrencies.